US deficit hits one trillion dollars

The US federal deficit topped one trillion US dollars (€714.7bn) for the first time ever and could grow to nearly two trillion (€1.42 trillion) by this autumn, intensifying fears about higher interest rates, inflation and the strength of the dollar.

The deficit has been widened by the huge sum the US government has spent to ease the recession, combined with a sharp decline in tax revenues. The cost of wars in Iraq and Afghanistan also is a major factor.