House Budget Bill Creates Awkward Moment for Markets
Between tariffs and the coming fiscal stimulus, expectations of lower borrowing costs this year are rapidly diminishing.
Market watch.
Photographer: Michael Nagle/Bloomberg
President Donald Trump cajoled House Republicans on Tuesday to go along with a budget bill that will not only add to what is already seen as unsustainable debt and deficits but also looks ominous for financial markets that have just recovered from the “Liberation Day” tariff fiasco.
The heart of the plan that came out of the House Budget Committee calls for extending the Tax Cuts and Jobs Act of 2107, the signature act of Trump’s first administration that is due to expire later this year. There are lots of additions that go far beyond extending the TCJA, such as eliminating taxes on tips and overtime pay, making the interest expense on car loans tax deductible, and increasing the cap on state and local tax deductions from the current $10,000.