Moody's US downgrade may curb Trump tax cuts, but bond markets stay calm, for now
The recent downgrading of the US sovereign rating by Moody's is unlikely to cause any major tumult in bond markets - although it may rein in the Trump regime's ambitions for tax cuts.Moody's is the last of the three major rating agencies (along with S&P and Fitch) to downgrade US debt. But many funds have also relaxed rules that confined them to top-rated securities.Over time, however, weaker ratings will lead to higher borrowing costs for the US government, which has piled up a staggering $36 tn debt against an estimated $30 tn GDP in 2025. This places the US government debt-to-GDP ratio on the high side among G7 economies. Yet, it remains within acceptable limits.The outsized supply of US debt among similarly rated sovereigns contributes to market stability, although Washington is not immune to action by bond vigilantes . It also helps that the dollar's dominance in international trade faces no immediate threat from any rival currency.Export-surplus nations find it more convenient to park their reserves in debt denominated in the currency they need for trade. Japan, Britain and China hold the largest stock of US treasuries, with Britain often acting as a proxy for hedge funds.China's holdings are on a downward trajectory, even as the rest of the world continues buying in. But bond markets have reacted to Trump-tariffs, and Beijing has responded to the Moody's tut-tut by seeking remedial action from Washington.That response will come from US Congress, which is expected to dial down Trump's economic agenda - tariffs, immigration and tax cuts. Even without the downgrades, bond markets will remain watchful of US fiscal consolidation. The outlook will darken further if Trump pushes the US economy towards stagflation
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
American Express hints at a big upgrade to its Platinum Credit card in 'largest investment ever'
American Express Co . teased updates coming later this year to its travel-focused Platinum credit cards, announcing what it called its 'largest investment ever' in a credit-card refresh. Amex announced today major updates coming to its US Consumer and Business Platinum Cards later this year. With these updates, the company is making its largest investment ever in a Card refresh. "More than forty years ago, we introduced the Platinum Card, and we continue to offer Platinum Cards with global servicing, unique benefits and experiences that our Card Members love,' said Howard Grosfield, Group President, U.S. Consumer Services. 'Platinum Card benefits and services resonate across generations, particularly with Millennial and Gen Z who accounted for 35% of total U.S. Consumer spending last quarter. We're going to take these Cards to a new level, not only in what they offer in travel, dining and lifestyle benefits, but also in how they look and feel, to meet the evolving needs of our customers.' ALSO READ: Why is Trump admin planning to expand travel ban to 36 more countries? Explained in 10 points by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Bank Owned Properties For Sale In Getasan (Prices May Surprise You) Foreclosed Homes | Search ads Search Now Undo Amex announces major updates to platinum cards With more airport lounge options than any other credit card issuer on the market, American Express offers access to over 1,550 lounges in more than 500 airports around the world and is opening three new Centurion Lounges globally in the next year — Newark, New Jersey; Salt Lake City, Utah; and Tokyo, Japan — bringing the total number of Centurion Lounges to 32. Amex CEO Steve Squeri is aiming to attract more high-spending Millennials and Gen Z consumers to the company's elite customer base. On June 16, he revealed plans for a significant upgrade to the Platinum card, set to roll out later this summer or early fall, as part of the effort to appeal to this younger, affluent demographic, according to Fortune. Live Events The company said this will be its biggest investment ever in a card program. 'We'll see two areas of investments,' adds Howard Grosfield, Group President for U.S. Consumer Services. 'We'll double down on all the things our cardmembers love now. And we'll be adding lots of exciting new brands.' ALSO READ: Juneteenth 2025 in US: Know the upcoming events in Washington DC, Virginia on June 19 In July 2021, Amex raised its Platinum card annual fee to $695 when it also added $200 in annual hotel credits. Since then, the New York-based company has faced intensifying competition for premium credit-card customers, including from JPMorgan Chase & Co.'s Sapphire Reserve card and Capital One Financial Corp.'s Venture X Rewards card, reports Bloomberg. The Amex update will apply to both the US consumer and business Platinum cards, the company said. It didn't provide more specifics on what changes are coming. 'Consumers' appetite for ever-higher annual fees and complex, incentive-driven rewards structures could be tested if demand slows, but the formula has driven growth consistently for decades,' Bloomberg Intelligence analyst Ben Elliott wrote in a note to clients. ALSO READ: Trump Mobile: As President's family announces cell phone company, a journalist's bizarre experience surfaces American Express also plans to update the Business Platinum Card to offer Card Members more benefits they can use to help their companies grow, the company said in a statement. Business Platinum Card members enjoy a flexible spending limit that adapts based on purchase, payment and credit history, business and travel benefits, rich rewards on business expenses, virtual cards and access to cashflow management tools. Business Platinum Card Members can also access the dining, lounge and hotel benefits. Access to American Express's global lounge network is one of the key perks of the Platinum Card. In a recent statement, Amex announced that a new Centurion Lounge is set to open at Tokyo's Haneda Airport within the next year. This adds to its previously revealed plans for new lounges in Salt Lake City and Newark, New Jersey.
New Indian Express
an hour ago
- New Indian Express
Marhowrah factory in Bihar to export 150 railway advanced locomotives to Guinea in Rs 3,000-crore deal
NEW DELHI: In a major boost to the 'Make in India' initiative, approximately 150 railway locomotives manufactured in India are being exported to Guinea. The Railway Locomotive Factory at Marhowrah in Bihar will supply 150 Evolution Series ES43ACmi locomotives for SimFer's Simandou iron ore project in Guinea, Africa, in a deal worth over Rs 3,000 crore. According to an official statement from the Ministry of Railways on Monday, 37 locomotives will be exported in the current financial year, 82 in the next financial year, and 31 locomotives in the third financial year. 'All these locomotives will have AC cabs. Each loco will have a single cab, and two locomotives together will carry the load of 100 wagons with maximum permissible speed,' said ED (I&P) Dileep Kumar, adding that the Railways had laid three types of tracks, broad gauge, standard gauge, and Cape gauge, within the Marhowrah Locomotive premises to facilitate the rollout of such locomotives. He stated that the locomotives, being manufactured at the Marhowrah plant in Bihar under Indian Railways, are enhancing India's industrial footprint. The project was secured through global competitive bidding, showcasing India's manufacturing excellence on the world stage.
Economic Times
an hour ago
- Economic Times
Trump Mobile plan revealed: Here's how much it will cost subscribers for unlimited talk, text, and data
In a bold extension of its brand portfolio, the Trump Organization on Monday officially announced the launch of its new wireless service, Trump Mobile , alongside a branded smartphone priced at $499. The service is expected to go live in September 2025 and has already generated buzz through its political branding and pricing strategy. The move, anchored on a monthly subscription model titled 'The 47 Plan' , marks yet another instance of the Trump business empire tying commercial ventures to the political identity of U.S. President Donald Trump , who is currently serving his second term as the 47th President of the United States. According to , the new mobile service will cost subscribers $47.45 per month and will include unlimited talk, text, and data , alongside additional features such as roadside assistance and a Telehealth and Pharmacy Benefit . The monthly rate and plan name are direct references to Trump's position as the 45th and now 47th U.S. President. Trump Mobile claims to provide network coverage equivalent to the nation's three largest wireless carriers — Verizon, AT&T, and T-Mobile — though representatives declined to specify which backend carrier powers the network, as mentioned in a report by NBC. The website further states that the service will offer U.S.-based customer support. However, when contacted, a customer service agent declined to reveal the exact location of the call center, citing 'security reasons.' Alongside the telecom plan, the Trump Organization announced the introduction of the Trump Phone , officially named the T1 . Priced at $499, the Android-based device reportedly comes with Android 15 OS , a 6.8-inch AMOLED screen , a 16-megapixel front camera , a 50-megapixel rear camera , 12GB of RAM , and 256GB of storage . The smartphone features a gold-colored metal frame etched with the American flag and branded slogans like 'Make America Great Again.' Much like other Trump-branded merchandise — including Trump Bibles, sneakers, and wristwatches — the Trump Mobile venture operates under a licensing agreement . The fine print on the official website notes that neither the mobile service nor the smartphone is developed, manufactured, or sold directly by the Trump Organization or its model has drawn scrutiny from ethics watchdogs due to potential conflicts of interest, especially given President Trump's dual role as a business magnate and head of state. Notably, President Trump reported earnings exceeding $8 million in 2024 from various licensing Trump Mobile's plan price point positions it at a premium, it appears costlier than several existing competitors. For instance, Visible by Verizon offers a similar unlimited plan at $25/month, and Mint Mobile has a comparable plan priced at $30/month over a 12-month term. As of Monday, the country's top wireless providers had not issued any public statements regarding the entry of Trumpmobile into the telecom space. With this strategic brand extension, the Trump Organization continues its trend of leveraging political capital into commercial ventures, setting the stage for what could be a high-profile addition to the U.S. mobile Mobile is a new wireless service announced by the Trump Organization on Monday. It is a branded telecom venture offering unlimited talk, text, and data, with a subscription plan called 'The 47 Plan.' The service is expected to launch in September Mobile claims to provide coverage equivalent to Verizon, AT&T, and T-Mobile, but has not disclosed which carrier powers its backend network. Customer service representatives declined to confirm the provider, citing security reasons.
