'Bank of Canada Governor Says US Deficits Are Unsustainable'

 Bank of Canada Governor Tiff Macklem warned that US fiscal policy is on an unsustainable path, citing large deficits and rising federal debt, Bloomberg reported Wednesday, citing an interview with the governor.

Macklem said the US has room to curb deficits given strong economic growth and relatively low taxes, but that doing so depends on political will, the report said. He also warned that US borrowing costs are spilling over into Canada's financial markets.

Global government borrowing and corporate debt issuance to fund artificial intelligence investment may be pushing up longer-term yields and Canada's neutral interest rate, Macklem told Bloomberg.

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