How America's debt ‘ticking bomb' could curb the RBA
It may seem like a distant issue for most Australians, but strategists are worried that the growing pile of US government debt is a ticking bomb that could fuel inflation around the would and hinder the Reserve Bank of Australia to meaningfully cut interest rates.
Congress is currently debating US President Donald Trump's so-called 'big beautiful bill' that includes significant tax cuts and lifting the government debt ceiling by up to $US5 trillion. That risks adding trillions of dollars to the US government's annual shortfall over the next decade and pushing the deficit to more than 7 per cent of GDP.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
ABC News
23 minutes ago
- ABC News
What Trump's "revenge tax" means for Australian investors
NAB's director of SMSF and investor behaviour, Gemma Dale says Donald Trump may be using the 'revenge tax' on foreign investment in the US, which is part of his 'Big, Beautiful Bill', as a negotiating tactic during trade talks while tariffs are on pause.
West Australian
34 minutes ago
- West Australian
‘Hopeium' of rate cuts and trade talks drives ASX 200 higher
Refreshed from the King's Birthday long weekend, the ASX 200 has surged to a new record close on Tuesday thanks to trade talks and renewed hope for a rate cut in July. The benchmark ASX 200 index surged 71.50 points or 0.84 per cent to 8,587.20, surpassing its previous record close of 8,555.8 set back on February 14. The broader All Ordinaries also jumped 70.80 points or 0.81 per cent to 8,812.70. The Australian dollar slid marginally during trading, but is still buying more than 65 US cents. On an overall strong day of trading 10 of the 11 sectors finished in the green led by the big banks, consumer discretionary and technology stocks. Zip was the best performing stock on the ASX 200 as it surged more than 6 per cent to $2.32, while Tabcorp shares jumped 5.71 per cent to $0.74 and Pilbara Minerals also jumped 5.46 per cent to $1.35. CBA continued to retest its own record highs, jumping a further 1.17 per cent to $182 with Australia's biggest bank now having a market capitalisation of $304.10bn. NAB shares jumped 1.53 per cent to $39.17, Westpac climbed 0.96 per cent to $33.50 and ANZ gained 1.12 per cent to $29.83. IG Market analyst Tony Sycamore said the banks were continuing their run up from the April lows on the back of falling rates spurring on the housing and credit markets. 'If rates fall back to 3.1 per cent, which is close to where we think neutral is for the RBA, that improves affordability which adds more demand for credit for the big banks,' he said. 'What happens to their margins? I don't think there's much of a difference between 3.85 or 3.1 per cent, there's still enough fat on the bone to make their generous profits.' The tech sector closed 1.6 per cent higher with shares in NextDC soaring 5.16 per cent to $13.86, while WiseTech Global jumped 2.36 per cent to $108.01 and Xero climbed 1.82 per cent to $192.10. On a heavy macro economic day, there were a number of factors driving the local bourse. In China deflation deepened to its worst level in almost two years in May, while US job figures came in hotter than expected although this was only due to the participation rate plummeting. There were also renewed hopes of a trade talk between the US and China, although US President Donald Trump said the discussions so far had been positive but 'not easy', while Treasury Secretary Scott Bessent called it a good meeting. Domestically, Australia's latest Westpac consumer sentiment index was released, showing Australians are feeling 'cautiously pessimistic.' Mr Sycamore said a combination of stronger than expected international news and renewed hopes of a rate cut domestically helped spur on the local market. 'When you put the weak China number together with weak consumer confidence in Australia and dig below the surface in the US job numbers, it is probably arguing for more rate cuts from central banks, which is probably the hopeium that drives these stock markets,' he said. 'Along with hopes of trade deals, that is why we are still near a record high.' In company news, shares in Monash IVF Group slumped 26.85 per cent to $0.545 after the fertility giant announced an embryo mix-up at its Melbourne laboratory, meaning the wrong embryo was implanted into a patient.
The Advertiser
an hour ago
- The Advertiser
Google's robotaxis targeted in LA riots, services cancelled
Waymo was called on to suspend its robotaxi service – at least partially – after its vehicles were deliberately targeted in the Los Angeles riots over the weekend. Several driverless Jaguar I-Pace electric robotaxis from Waymo – worth around US$100,000 (A$153,000) – ended up being graffitied and set on fire during clashes between authorities and protesters in the Californian capital. It's alleged that users of Waymo, owned by Google parent company Alphabet, deliberately ordered vehicles from the transport service with the sole intention of damaging them as part of protests in the US city. Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now. The company could not confirm if this was the case, as reported by the New York Times, which published a statement from Waymo saying its vehicles were simply "in the wrong place at the wrong time". Images posted to various social media platforms from the weekend showed protesters standing on top of a Waymo I-Pace waving a Mexican flag, with the vehicle covered in graffiti and several others nearby billowing smoke and flames. After being asked to shut down the app to prevent further attacks, the company said on Monday it was limiting services based on the protests. "We're aware of potential protests and will not be providing service in the areas protesters may be gathering out of an abundance of caution," a Waymo spokesperson said in a statement. Services were first suspended on Sunday evening, according to the NYT as the company worked with the Los Angeles Police Department (LAPD) to limit damage to vehicles. The company said in May it was providing more than 250,000 driverless rides in Los Angeles, San Francisco, Phoenix and Austin. Texas is the state in which Tesla CEO Elon Musk – who previously played a prominent role in US President Donald Trump's administration – said the US automaker would introduce its first robotaxi service later this month. Content originally sourced from: Waymo was called on to suspend its robotaxi service – at least partially – after its vehicles were deliberately targeted in the Los Angeles riots over the weekend. Several driverless Jaguar I-Pace electric robotaxis from Waymo – worth around US$100,000 (A$153,000) – ended up being graffitied and set on fire during clashes between authorities and protesters in the Californian capital. It's alleged that users of Waymo, owned by Google parent company Alphabet, deliberately ordered vehicles from the transport service with the sole intention of damaging them as part of protests in the US city. Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now. The company could not confirm if this was the case, as reported by the New York Times, which published a statement from Waymo saying its vehicles were simply "in the wrong place at the wrong time". Images posted to various social media platforms from the weekend showed protesters standing on top of a Waymo I-Pace waving a Mexican flag, with the vehicle covered in graffiti and several others nearby billowing smoke and flames. After being asked to shut down the app to prevent further attacks, the company said on Monday it was limiting services based on the protests. "We're aware of potential protests and will not be providing service in the areas protesters may be gathering out of an abundance of caution," a Waymo spokesperson said in a statement. Services were first suspended on Sunday evening, according to the NYT as the company worked with the Los Angeles Police Department (LAPD) to limit damage to vehicles. The company said in May it was providing more than 250,000 driverless rides in Los Angeles, San Francisco, Phoenix and Austin. Texas is the state in which Tesla CEO Elon Musk – who previously played a prominent role in US President Donald Trump's administration – said the US automaker would introduce its first robotaxi service later this month. Content originally sourced from: Waymo was called on to suspend its robotaxi service – at least partially – after its vehicles were deliberately targeted in the Los Angeles riots over the weekend. Several driverless Jaguar I-Pace electric robotaxis from Waymo – worth around US$100,000 (A$153,000) – ended up being graffitied and set on fire during clashes between authorities and protesters in the Californian capital. It's alleged that users of Waymo, owned by Google parent company Alphabet, deliberately ordered vehicles from the transport service with the sole intention of damaging them as part of protests in the US city. Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now. The company could not confirm if this was the case, as reported by the New York Times, which published a statement from Waymo saying its vehicles were simply "in the wrong place at the wrong time". Images posted to various social media platforms from the weekend showed protesters standing on top of a Waymo I-Pace waving a Mexican flag, with the vehicle covered in graffiti and several others nearby billowing smoke and flames. After being asked to shut down the app to prevent further attacks, the company said on Monday it was limiting services based on the protests. "We're aware of potential protests and will not be providing service in the areas protesters may be gathering out of an abundance of caution," a Waymo spokesperson said in a statement. Services were first suspended on Sunday evening, according to the NYT as the company worked with the Los Angeles Police Department (LAPD) to limit damage to vehicles. The company said in May it was providing more than 250,000 driverless rides in Los Angeles, San Francisco, Phoenix and Austin. Texas is the state in which Tesla CEO Elon Musk – who previously played a prominent role in US President Donald Trump's administration – said the US automaker would introduce its first robotaxi service later this month. Content originally sourced from: Waymo was called on to suspend its robotaxi service – at least partially – after its vehicles were deliberately targeted in the Los Angeles riots over the weekend. Several driverless Jaguar I-Pace electric robotaxis from Waymo – worth around US$100,000 (A$153,000) – ended up being graffitied and set on fire during clashes between authorities and protesters in the Californian capital. It's alleged that users of Waymo, owned by Google parent company Alphabet, deliberately ordered vehicles from the transport service with the sole intention of damaging them as part of protests in the US city. Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now. The company could not confirm if this was the case, as reported by the New York Times, which published a statement from Waymo saying its vehicles were simply "in the wrong place at the wrong time". Images posted to various social media platforms from the weekend showed protesters standing on top of a Waymo I-Pace waving a Mexican flag, with the vehicle covered in graffiti and several others nearby billowing smoke and flames. After being asked to shut down the app to prevent further attacks, the company said on Monday it was limiting services based on the protests. "We're aware of potential protests and will not be providing service in the areas protesters may be gathering out of an abundance of caution," a Waymo spokesperson said in a statement. Services were first suspended on Sunday evening, according to the NYT as the company worked with the Los Angeles Police Department (LAPD) to limit damage to vehicles. The company said in May it was providing more than 250,000 driverless rides in Los Angeles, San Francisco, Phoenix and Austin. Texas is the state in which Tesla CEO Elon Musk – who previously played a prominent role in US President Donald Trump's administration – said the US automaker would introduce its first robotaxi service later this month. Content originally sourced from:
