📢 CHINA SAYS U.S. DIALOGUE TO CONTINUE AS CHINA HINTS TRADE TALKS ARE ADVANCING - CNBC
The U.S. and China have agreed to maintain communication following a call between Chinese Vice Foreign Minister Ma Zhaoxu and U.S. Deputy Secretary of State Christopher Landau, according to a brief readout released by the Chinese Foreign Ministry on Friday. Both sides exchanged thoughts on crucial issues during the call on Thursday, the statement said, without elaborating. The U.S. Department of State issued a similar statement Thursday, briefly noting the consensus on the importance of the bilateral relationship and an agreement to keep open lines of communication. The statement came as Beijing and Washington continued to trade swipes at each other, despite the tariff de-escalation following a meeting between both sides in Switzerland earlier this month. Source: CNBC
House to vote post-midnight on President Trump's Big Beautiful Bill, pushing tax cuts, spending reductions, and America First policies. Speaker Johnson confident in passage despite GOP holdouts.
An analysis by itep.org comes to the conclusion that two-thirds of the tax cuts offered in 2027 would go to the top 20 percent of families, and 41 percent would flow to just the top 5 percent of families. https://lnkd.in/dS-KWdQV.
Canada's national pension fund piled into US market in Q1 despite the 'Buy Canada' push.
Another proof that the "Sell America" narrative is overdone? Source: Eric Balchunas, Bloomberg
The Federal Reserve has now lost a combined $192 Billion over the last 2 years
Source: Barchart, Wolfstreet.com
With the clock ticking on America’s $36 trillion debt ceiling (which could be breached as soon as August), the national debt continues to climb, as it has for decades.
According to the Congressional Budget Office, the US public debt stood at 98% of GDP last year, and is set to surpass the WWII peak by 2029, hitting 119% by 2035. 🔴 What might be of particular concern to the number crunchers at Moody’s is not just the current level of federal debt, but how quickly it’s growing. Last year, the deficit was $1.8 trillion, more than 6% of GDP. The interest payments on debt alone were some $882 billion, greater than the defense and Medicare budgets. 😨 The latest tax cuts and spending push — or, as President Trump calls it, “the big, beautiful bill” — could add another ~$4 trillion to the federal deficit over the next decade, with Moody’s now projecting that the debt-to-GDP ratio could surge to 134% by 2035. In an interview with NBC yesterday, Treasury Secretary Scott Bessent shrugged off the downgrade, calling Moody’s a “lagging indicator.” But the markets took note, with the 30-year Treasury yield topping 5% this morning, a level last seen in late 2023.
Is it the end game for US Treasuries?
The Bank of Japan owns a whopping 52% of its domestic government bond market. Since July, the BoJ has been gradually reducing the size of its holdings. The estimated value of Japan's government debt market is $7.8 TRILLION, world's 3rd largest. Source: Global Markets Investor, Bloomberg
Moody’s downgrade does NOT change much; they just aligned with S&P and Fitch.
What DOES matter is the fiscal and debt situation which remain major worries Source cartoon: Hedgeye
After a record 25 consecutive months of negative real wage growth, wages have now outpaced reported inflation on a YoY basis for 24 straight months.
This is a great sign for the American worker that hopefully continues. Source: Charlie Bilello
