General economic conditions heavily influence the well-being of U.S. agriculture. U.S, and world interest rates, inflation, national income, and exchange rates are linked to U.S. agricultural prices and production levels and farm sector financial conditions. Characteristics specific to the farm sector, such as highly flexible commodity prices and large initial production costs, make agriculture especially sensitive to general economic changes. Although monetary and fiscal policies are typically decided and evaluated with general economic performance in mind, these policies can have unintended effects on the farm sector. The outlook for the next several years is for faster growth in the money supply and a lower Federal budget deficit, a situation that would benefit U.S. agriculture.