Trump Era 2025-2029 : Stock and Economic Comment

[mullokintyre]

Markets remain fixated on the US government’s fiscal trajectory after the House passed President Trump’s so-called “One Big Beautiful Bill” — a sweeping package that permanently extends Trump-era tax cuts, introduces new tax breaks, and significantly boosts defence and immigration enforcement spending.

According to the Congressional Budget Office, the measure could add nearly US$4 trillion to the national debt over the next decade. Those concerns were reflected in the bond market, where the 30-year Treasury yield climbed as high as 5.161% — its highest since 2023 — before easing later in the session. The 10-year yield also flirted with multi-year highs before retreating.

The spike in yields reflects both inflationary fears and weakening demand for long-dated government debt. A lacklustre auction of 20-year Treasurys on Wednesday only deepened investor unease, further pressuring equities, especially rate-sensitive sectors.

WTF have the markets been doing for the last twenty years?
Funny how nobody seemed to worry about the addition of x trillions to the debt over the past ten to 15 years, and all of a sudden its a major problem.
Ten trillion has been added since the beginning of 2020, ten trillion in five years versus 4 trillion in 10.

Mick

 

[TimeISmoney]

WTF have the markets been doing for the last twenty years?
Funny how nobody seemed to worry about the addition of x trillions to the debt over the past ten to 15 years, and all of a sudden its a major problem.
Ten trillion has been added since the beginning of 2020, ten trillion in five years versus 4 trillion in 10.
View attachment 199988
Mick

Ironocially wasn't the whole point of screwing the peoples of the US with Doge to cut back on debt?

Bessent raised the floor on the debt ceiling the other day, and now it's free for all.

It's just kicking the can down the road.

 

[ShareSuccess]

Great Commentary Gents!....Love the Content, Very educational!

 

[over9k]

WTF have the markets been doing for the last twenty years?
Funny how nobody seemed to worry about the addition of x trillions to the debt over the past ten to 15 years, and all of a sudden its a major problem.
Ten trillion has been added since the beginning of 2020, ten trillion in five years versus 4 trillion in 10.
View attachment 199988
Mick

Interest rates. They were dumped down to nothing post-gfc which meant the debt burden wasn't much of a burden at all. But then post-covid they've soared (relatively speaking) so the interest on the debt has now become a serious problem.

An entire generation of my non-economically-educated peers, after spending their entire adult lives with interest rates at basically nothing, started to consider said non-existent interest rates to be normal and so did governments running budget deficits.

Hence governments have borrowed money as if rates were going to stay at nothing forever and now that they've finally bounced (and we're still way below a historical normal) they've found themselves in a whole world of pain because of it.

 

[Knobby22]

WTF have the markets been doing for the last twenty years?
Funny how nobody seemed to worry about the addition of x trillions to the debt over the past ten to 15 years, and all of a sudden its a major problem.
Ten trillion has been added since the beginning of 2020, ten trillion in five years versus 4 trillion in 10.
View attachment 199988
Mick

This is why:

As part of Trump’s plan to remove undocumented immigrants from the country, Immigration and Customs Enforcement (Ice) will receive $45bn for detention facilities, $14bn for deportation operations and billions of dollars more to hire an additional 10,000 new agents by 2029. More than $50bn is allocated for the construction of new border fortifications, which will probably include a wall along the border with Mexico.
All these tax breaks and other spending come with a major cost. Congress’s non-partisan fiscal scorekeeper, the Congressional Budget Office (CBO), estimates the bill’s tax policies alone will add nearly $3.8tn to the federal deficit.

Personally, I think he should reduce the tax cuts. We will see what Congress does.

Trump’s ‘big, beautiful’ spending bill, from tax cuts to mass deportations

All the key points laid out in the US president’s House-approved sweeping bill as it awaits Senate consideration

www.theguardian.com

 

[over9k]

This is why:

As part of Trump’s plan to remove undocumented immigrants from the country, Immigration and Customs Enforcement (Ice) will receive $45bn for detention facilities, $14bn for deportation operations and billions of dollars more to hire an additional 10,000 new agents by 2029. More than $50bn is allocated for the construction of new border fortifications, which will probably include a wall along the border with Mexico.
All these tax breaks and other spending come with a major cost. Congress’s non-partisan fiscal scorekeeper, the Congressional Budget Office (CBO), estimates the bill’s tax policies alone will add nearly $3.8tn to the federal deficit.

Personally, I think he should reduce the tax cuts. We will see what Congress does.

Trump’s ‘big, beautiful’ spending bill, from tax cuts to mass deportations

All the key points laid out in the US president’s House-approved sweeping bill as it awaits Senate consideration

www.theguardian.com

Congress passed a revised version, it hasn't gone to a senate vote yet. Can't say I've kept track of whether the senate are likely to pass it or not though.

 

[mullokintyre]

This is why:

As part of Trump’s plan to remove undocumented immigrants from the country, Immigration and Customs Enforcement (Ice) will receive $45bn for detention facilities, $14bn for deportation operations and billions of dollars more to hire an additional 10,000 new agents by 2029. More than $50bn is allocated for the construction of new border fortifications, which will probably include a wall along the border with Mexico.
All these tax breaks and other spending come with a major cost. Congress’s non-partisan fiscal scorekeeper, the Congressional Budget Office (CBO), estimates the bill’s tax policies alone will add nearly $3.8tn to the federal deficit.

Personally, I think he should reduce the tax cuts. We will see what Congress does.

Trump’s ‘big, beautiful’ spending bill, from tax cuts to mass deportations

All the key points laid out in the US president’s House-approved sweeping bill as it awaits Senate consideration

www.theguardian.com

I am not arguing whether Trumps policies are good or bad, there are plenty doing that already.
I am arguing that the commentators, the hedge fundies, the members of congress , the fed, the bankers, the Hollywood luvvies, the general elites, etc etc have been more than happy with the increasing debt over the past few years, but now all of a sudden its a problem.
Its just like the downgrading by moody's too little too late.
It matters little whether the debt is 35 trill or 45trill, it aint goin to be paid back any time soon.
Mick

 

[over9k]

I am not arguing whether Trumps policies are good or bad, there are plenty doing that already.
I am arguing that the commentators, the hedge fundies, the members of congress , the fed, the bankers, the Hollywood luvvies, the general elites, etc etc have been more than happy with the increasing debt over the past few years, but now all of a sudden its a problem.
Its just like the downgrading by moody's too little too late.
It matters little whether the debt is 35 trill or 45trill, it aint goin to be paid back any time soon.
Mick

You've answered your own question there mullok.

It ain't going to be paid back any time soon by them

 

[Knobby22]

I am not arguing whether Trumps policies are good or bad, there are plenty doing that already.
I am arguing that the commentators, the hedge fundies, the members of congress , the fed, the bankers, the Hollywood luvvies, the general elites, etc etc have been more than happy with the increasing debt over the past few years, but now all of a sudden its a problem.
Its just like the downgrading by moody's too little too late.
It matters little whether the debt is 35 trill or 45trill, it aint goin to be paid back any time soon.
Mick

Elites, yea/na. They are getting the tax cuts.( the billionaire class).

The debt rise is going to be accelerating. bond investors are entitled to be wary.

 

[mullokintyre]

Elites, yea/na. They are getting the tax cuts.( the billionaire class).

The debt rise is going to be accelerating. bond investors are entitled to be wary.

The debt rise is not acellerating if you accept the data in the orignal post that it will increase by 4Trill over the decade.
I know that sometimes math can be difficult, but most people will realise that debt increasing by 10trill over 5 years is a significantly bigger rate than 4trillion over ten years.
It matters little now, its far too late.
Mick

 

[Knobby22]

The debt rise is not acellerating if you accept the data in the orignal post that it will increase by 4Trill over the decade.
I know that sometimes math can be difficult, but most people will realise that debt increasing by 10trill over 5 years is a significantly bigger rate than 4trillion over ten years.
It matters little now, its far too late.
Mick

I read it as $4 trillion on top of the expected rise if nothing was changed.
It depends a lot on how much money Trump can get from tariffs. There are a lot of balls up in the air.

 

[mullokintyre]

A good proportion of Tax cuts are not increasing debt, they were already in place, the bill extends the time for them by another 4 years, so I fail to understand how they will increase debt over and above the rate of increase we have had.
The tota of individual Tax take this year is budgeted to be 1.7 trillion, with Social security and Medicare levies another 1 trillion.
Corporate taxes equate to a lousy 255 billion, thats the part I find most stunning.
Mick

 

[mullokintyre]

Interest rates. They were dumped down to nothing post-gfc which meant the debt burden wasn't much of a burden at all. But then post-covid they've soared (relatively speaking) so the interest on the debt has now become a serious problem.

An entire generation of my non-economically-educated peers, after spending their entire adult lives with interest rates at basically nothing, started to consider said non-existent interest rates to be normal and so did governments running budget deficits.

Hence governments have borrowed money as if rates were going to stay at nothing forever and now that they've finally bounced (and we're still way below a historical normal) they've found themselves in a whole world of pain because of it.

If we are to believe the pundits, interest rates in the USA are coming down.
So if I am a potential buyer of long dated bonds, I would be buying now when yields are high.
If the cash rates fall, those bonds will look far more attractive, and the yield is long dated.
Mick

 

[over9k]

If we are to believe the pundits, interest rates in the USA are coming down.
So if I am a potential buyer of long dated bonds, I would be buying now when yields are high.
If the cash rates fall, those bonds will look far more attractive, and the yield is long dated.
Mick

You'll see that the long dated bond yields are soaring, which tells you that the market thinks that rate rises will soon become unstoppable.

Trump or whoever else can dismiss powell or print money or whatever for only so long before market forces will just take care of the problem another way (send inflation stratospheric or what have you).



As you can see short term have dumped and long term have increased, i.e short term kept artificially low which means more pain for longer once this particular period is over.

If trump (or anyone's) policies were actually doing something to fix the problem you'd see yields across the board dumping and instead we're seeing the opposite on the long term.

 

[over9k]

Corporate taxes equate to a lousy 255 billion, thats the part I find most stunning.

Yeah, it's a very common misconception that most of the tax pool is paid by corporations. Raising corporate tax rates will do very little to fix a fiscal position.

Even raising taxes on high income earners won't do much on account of there actually being so few people actually earning a high income.

I've said many times before and I'll say again, bracket creep along with large scale spending cuts is the only real way to fix the problem.

 

[mullokintyre]

You'll see that the long dated bond yields are soaring, which tells you that the market thinks that rate rises will soon become unstoppable.

Trump or whoever else can dismiss powell or print money or whatever for only so long before market forces will just take care of the problem another way (send inflation stratospheric or what have you).

View attachment 200022

As you can see short term have dumped and long term have increased, i.e short term kept artificially low which means more pain for longer once this particular period is over.

If trump (or anyone's) policies were actually doing something to fix the problem you'd see yields across the board dumping and instead we're seeing the opposite on the long term.

The US will go into a recession, no matter what Trump does or does not do.
The FED will then keep reducing rates.
Mick

 

[waterbottle]

Or:
1. US default
2. Enters recession
3. Global credit crunch ala 2008
4. Central banks drop to 0%

 

[over9k]

Nah they're the reserve currency, they won't default.

Meanwhile, trump now calling for a 50% tariff on the EU starting on the first of june (about a week from now).

 

[over9k]

EU now gets 20%. Lol.

SO MUCH FOR THAT

 

[farmerge]

So The Trumpet is spitting out his dummy with the EU and imposing a 50% tariff on June 1.
Well that is today's version I.
What will Version II be in a couple of days??