Billionaire Tesla (TSLA) CEO Elon Musk, alongside entrepreneur and former 2024 presidential candidate Vivek Ramaswamy, will lead the new "Department of Government Efficiency (DOGE)."

President-elect Donald Trump has chosen Musk and Ramaswamy to head the new agency focused on cutting government spending. It's unknown how DOGE could change government spending, but some expect the agency to target government organizations like the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC).

Citi chief US economist Andrew Hollenhorst sits down with Julie Hyman and Josh Lipton on Market Domination to discuss what the new agency could mean for federal spending and the national deficit.

"There's probably going to be a large fiscal bill that comes out at the beginning of the Trump presidency," Hollenhorst tells Yahoo Finance. He notes how Congress members "feel about spending restraint" could become very important as the Republican Party is expected to hold a slim majority in the House and controls the Senate.

Trump is expected to extend the tax cuts he introduced in his first term as president, which is yet to be factored into the US national deficit. "There is a deficit debt issue in the US [and] at some point it needs to be dealt with and that will have economic effects when it is," the economist says.

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This post was written by Naomi Buchanan.