Highlights
The Moody's downgrade to US debt has heightened focus on whether the House of Representatives will approve a bill that would deliver President Trump his wish list of fiscal measures, including an extension of his 2017 tax cuts. The tax cuts, which are expected to add trillions to the deficit over the next decade, have become the latest flashpoint in financial markets where concern is rising that investors will require much higher yields to finance rising deficits.
The House Budget Committee advanced the president's One Big Beautiful Act on Monday, but its prospects for House passage this week are limited by opposition from far right Republicans who want deeper spending cuts, and from blue state Republicans who want to restore larger federal tax relief for taxpayers paying high state and local taxes. US bond bulls are hoping President Trump and the GOP leadership will fail to get the needed votes. That would mean the expiring tax cuts would not be extended, good news for Treasury coffers, and it would mean less supply for the bond market to swallow. It would also mean the 2017 cut to SALT tax breaks would expire, a boon to taxpayers in states like New York, New Jersey and California, but bad news for federal deficits.
Investors are also on tenterhooks awaiting any news on the trade front. Traders were not amused by Treasury Secretary Scott Bessent's reminder that countries that do not negotiate in good faith to reach a trade accord with the US will see their tariffs rise. It was not clear what negotiating in good faith means or when Trump might announce the higher tariffs are back.
The House Budget Committee advanced the president's One Big Beautiful Act on Monday, but its prospects for House passage this week are limited by opposition from far right Republicans who want deeper spending cuts, and from blue state Republicans who want to restore larger federal tax relief for taxpayers paying high state and local taxes. US bond bulls are hoping President Trump and the GOP leadership will fail to get the needed votes. That would mean the expiring tax cuts would not be extended, good news for Treasury coffers, and it would mean less supply for the bond market to swallow. It would also mean the 2017 cut to SALT tax breaks would expire, a boon to taxpayers in states like New York, New Jersey and California, but bad news for federal deficits.
Investors are also on tenterhooks awaiting any news on the trade front. Traders were not amused by Treasury Secretary Scott Bessent's reminder that countries that do not negotiate in good faith to reach a trade accord with the US will see their tariffs rise. It was not clear what negotiating in good faith means or when Trump might announce the higher tariffs are back.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
