Investors weren't relishing the idea of a government shutdown, but don't appear terribly excited with what they got in its place. A budget that increases discretionary spending by nearly $300 billion in the coming years helped fuel worries that profligate federal spending would set of a chain reaction that triggers a recession, and ends the bull market in stocks. The market whipped back and forth Friday, hours after the bipartisan agreement came about that ended a blink-and-you-missed-it government shutdown. While the threat of a prolonged impasse went away, the accord's long-term ramifications will not. The Committee for a Responsible Federal Budget broke down what the numbers will mean to the nation's fiscal picture: An addition of $420 billion to the national debt over the next 10 years, due to interest payments, and a deficit of more $2 trillion of annual deficits by 2027 if the tax cuts passed at the end of 2017 are made permanent. Those projections don't even touch infrastructure spending. If President Donald Trump gets his way, before year's end the nation will be engaged in a $1.5 trillion program to upgrade public transportation, roads, bridges and other public works projects.

There is a risk that Congress' new-found largesse is sowing the seeds of the next fiscal crisis when a recession inevitably hits. Andrew Hunger and Michael Pearce Capital Economics

What that means in the near-term is probably growth, at least in terms of GDP. The increased spending will grease the economy's wheels, and there likely will be a parade of upgrades to the 2018 growth projections. But there's another side to all the free spending: The real possibility of an uptick in inflation — which this market currently fears more than anything. Already, the Treasury is forecasting nearly $1 trillion in borrowing needs this year, a sum that it projected to rise in subsequent years. Combining the tax cuts and rise in discretionary spending likely will push the deficit, currently pegged at about 3.4 percent of GDP, to more than 5 percent by the end of 2018. That would put it at its highest-ever peacetime level outside of recessionary periods, according to Capital Economics. "Fiscal policy could become a drag on the economy by 2020 if Congress failed to agree on a new deal to raise spending levels again, and the previous caps were re-imposed," economists Andrew Hunter and Michael Pearce at Capital economics wrote in a report for clients. "Furthermore, there is a risk that Congress' new-found largesse is sowing the seeds of the next fiscal crisis when a recession inevitably hits," the analysts added.

Return of the 'bond vigilantes'?