Latest news with #Trump2.0
Yahoo
6 hours ago
- Business
- Yahoo
Treasury and dollar slides reignite 'Sell America' fears. But there's still a buying opportunity in one corner of US debt.
Treasurys are widely considered risk-free assets, but recent market patterns show investors are getting jittery. Long-dated Treasury yields breached 5% recently, indicating weaker demand and investor hesitation. Analysts suggest gold and short-term Treasurys as safer options amid economic uncertainty. Treasurys have been under scrutiny amid President Donald Trump's trade policies, with long-dated debt facing pressure. But analysts say there is still opportunity in the bond market. Short-dated Treasurys are still seen as safe amid the dollar's dominance and likely Federal Reserve interest rate cuts should the economy enter a downturn. "We have seen a bit more outflow from US dollar bonds, but I don't see anything that will be replacing the US dollar in the future," Warut Promboon, the managing partner at Hong Kong-based research firm Bondcritic, told Business Insider. His comments come as 30-year yields recently climbed above 5% — a sign of weaker demand as investors grow wary of locking in lending to the US government for decades. Warut, who has over 20 years of experience in the bond market, is advising clients to lean into gold and shorter-dated dollar bonds, such as five-year Treasurys. While Warut isn't bearish on 10-year Treasurys, he prefers the five-year term debt due to its shorter maturity and lower exposure to long-term volatility. His comments come amid an unusual divergence in Treasury yields, which have risen, and the dollar, which has declined — a trend that some have termed the "Sell America trade." His take echoes a recent call from Goldman Sachs, which last week recommended adding gold and short-term Treasurys to portfolios. Gold prices reached a record high of over $3,500 per ounce in April as investors fled to the time-tested store of value due to unprecedented uncertainty. Due to Trump's import tariffs and policy uncertainty, analysts are uncertain about the longer-term outlook for growth and bond yields. "The broader structural story is that US economic exceptionalism is fading as the burden of twin deficits grows heavier," wrote analysts at Deutsche Bank on Monday, referring to the US's fiscal and current account deficit. The analysts said they are bearish on the dollar and see upward pressure on bond yields. "The dollar's dominance is waning; valuation and capital flow dynamics are taking over," the Deutsche Bank analysts added. However, it may be premature to assume that the divergence in the dollar and Treasury yields is a permanent feature, wrote Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan. "The negative flip in USD-UST yield correlation arguably reflects a temporary recalibration process of risk re-pricing, even if it is abrupt and non-linear," he wrote. "Specifically, to account for a conspiracy of fiscal, credit, trade, geo-economic risks in the wake of brutal Trump 2.0 tariff and wider geo-economic assault that has inflicted untold US self-harm," Varathan wrote. The recent developments in the usually stable Treasury markets are raising fears of a US debt crisis. On Sunday, Treasury Secretary Scott Bessent addressed the issue directly, saying categorically that the US is "never going to default" on its debt. "That is never going to happen," Bessent told CBS' "Face the Nation" on Sunday. "We are on the warning track, and we will never hit the wall." Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Axios
7 hours ago
- Business
- Axios
America's two realities
Republicans see a U.S. in bloom. Democrats see one shadowed in gloom. The big picture: Polling shows deep divides in public sentiment driven by partisanship in a starkly polarized Trump 2.0 era. By the numbers: Overall, 38% of Americans are satisfied with the way things are going in the country, according to a May 1-18 Gallup poll. That number, which sat at just 20% in January, has climbed — thanks to a massive surge in Republican satisfaction. 79% of Republicans say they're satisfied, near the record high for the party. In January, that number was just 10%. The outlook for Dems is bleak, with just 4% satisfaction. Zoom in: On the economy, partisan outlooks have changed far more dramatically than the macroeconomic indicators. In September 2024 — ahead of President Trump's November victory — just 13% of Republicans felt fairly or very good about the condition of the country's economy, compared to 67% of Democrats, according to a CBS News poll. Of Republicans, 86% rated the economy as very or fairly bad. Fast-forward to last week, and the tables have turned: 64% of Republicans rated the national economy as very or fairly good, while just 22% of Democrats agreed. Seventy-four percent of Dems say the economy is bad, compared to 30% of Republicans. Trump's economic blame game (the good parts belong to him, the bad parts are former President Biden's) is one undercurrent for those numbers as Republicans swing toward the positive and Democrats settle in the negative. Reality check: Inflation has continued to cool, and the stock market has brushed itself off in the wake of Trump's "Liberation Day" shock. But the threat of an escalating trade war looms large over the global economy. The Organisation for Economic Co-operation and Development on Tuesday slashed U.S. growth forecasts. However, projections hinge on an uncertain tariff landscape, Axios' Ben Berkowitz writes. Consumer sentiment remained near its lowest levels in May, per the University of Michigan's index, though Republican sentiment was far higher than it was for Democrats. The data suggests Republicans might actually spend more, given their confidence in America's economic trajectory, and Democrats less. Zoom out: A Pew Research Center survey from March identified an area of harmony: Vast majorities of Republicans (92%) and Democrats (91%) agree that it's important for the U.S. to be respected around the world. But while more than 70% of Republicans and Republican leaners say the U.S. is currently respected, just 39% of Democrats and Democratic leaners agree — and most Dems now believe America's influence is diminishing. By contrast, 67% of Republicans and Republican leaners said U.S. influence was getting weaker last year. Now that's dropped to 37%.
Business Insider
14 hours ago
- Business
- Business Insider
Treasury and dollar slides reignite 'Sell America' fears. But there's still a buying opportunity in one corner of US debt.
Treasurys have been under scrutiny amid President Donald Trump's trade policies, with long-dated debt facing pressure. But analysts say there is still opportunity in the bond market. Short-dated Treasurys are still seen as safe amid the dollar's dominance and likely Federal Reserve interest rate cuts should the economy enter a downturn. "We have seen a bit more outflow from US dollar bonds, but I don't see anything that will be replacing the US dollar in the future," Warut Promboon, the managing partner at Hong Kong-based research firm Bondcritic, told Business Insider. His comments come as 30-year yields recently climbed above 5% — a sign of weaker demand as investors grow wary of locking in lending to the US government for decades. Warut, who has over 20 years of experience in the bond market, is advising clients to lean into gold and shorter-dated dollar bonds, such as five-year Treasurys. While Warut isn't bearish on 10-year Treasurys, he prefers the five-year term debt due to its shorter maturity and lower exposure to long-term volatility. His comments come amid an unusual divergence in Treasury yields, which have risen, and the dollar, which has declined — a trend that some have termed the "Sell America trade." His take echoes a recent call from Goldman Sachs, which last week recommended adding gold and short-term Treasurys to portfolios. Gold prices reached a record high of over $3,500 per ounce in April as investors fled to the time-tested store of value due to unprecedented uncertainty. Caution over longer-dated Treasurys Due to Trump's import tariffs and policy uncertainty, analysts are uncertain about the longer-term outlook for growth and bond yields. "The broader structural story is that US economic exceptionalism is fading as the burden of twin deficits grows heavier," wrote analysts at Deutsche Bank on Monday, referring to the US's fiscal and current account deficit. The analysts said they are bearish on the dollar and see upward pressure on bond yields. "The dollar's dominance is waning; valuation and capital flow dynamics are taking over," the Deutsche Bank analysts added. However, it may be premature to assume that the divergence in the dollar and Treasury yields is a permanent feature, wrote Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan. "The negative flip in USD-UST yield correlation arguably reflects a temporary recalibration process of risk re-pricing, even if it is abrupt and non-linear," he wrote. "Specifically, to account for a conspiracy of fiscal, credit, trade, geo-economic risks in the wake of brutal Trump 2.0 tariff and wider geo-economic assault that has inflicted untold US self-harm," Varathan wrote. The recent developments in the usually stable Treasury markets are raising fears of a US debt crisis. On Sunday, Treasury Secretary Scott Bessent addressed the issue directly, saying categorically that the US is "never going to default" on its debt. "That is never going to happen," Bessent told CBS' "Face the Nation" on Sunday. "We are on the warning track, and we will never hit the wall."
Mint
2 days ago
- Business
- Mint
₹2 trillion GST revenue in May, points to strong consumer sentiment, dumping concerns
New Delhi: Central and state governments collected over ₹2 trillion in Goods and Services Taxes (GST) in May before adjusting for refunds, official data showed on Sunday, a 16% annual improvement that sustains the robust tax performance seen in the previous month. The collections in May also benefited from the strong 25% growth in gross receipt of Integrated GST or IGST—the type of GST levied on imported goods, showing strong import value growth at the beginning of the current financial year amid trade uncertainty. In April too, IGST on imports had grown nearly 21% before refunds, compared with a 13.6% growth in March, prompting some experts to flag the possibility of dumping of goods into India by other countries as the Trump tariff announcement came in April. Also read: Government drove capex in pre-election year as private sector held back IGST accounted for about a fourth of gross GST revenue in May. GST collections from domestic sales too witnessed a strong 13.7% growth in May, faster than the 10.1% nominal GDP growth the Central government has forecast, suggesting strong consumer sentiments. Data also showed that industrialized states barring Gujarat, reported strong growth performance. While the largest state economy, Maharashtra, reported a 17% annual growth in GST revenue, Tamil Nadu reported a 25% jump, Karnataka 20% and Delhi 38%. Gujarat reported a muted 4% annual growth in May. After adjusting for tax refunds, Centre and states collected ₹1.74 trillion in May, 20.4% more than the revenue collected in the same time a year ago. In the first two months of the current financial year, net GST revenue of Centre and states grew at an average of 14%, faster than the projected nominal GDP growth for the current year. Signs of dumping? After refunds, net domestic GST revenue grew at 9.7% in May, nearly the same as in April, but the net customs revenue in May— IGST and cess on imports—grew at a spectacular 73% in May, compared with an unimpressive 5.2% in the previous month. Also read: Tax rate revamp on GST Council agenda; India to push FATF to grey list Pakistan The growth in IGST revenue from imports and the fact that export refunds are not growing correspondingly, reflect the fact that import growth far outstrips export growth, explained Vivek Jalan, founder and partner at Tax Connect Advisory Services LLP. The taxes paid on goods and services used in the products that are exported are refunded to exporters to make shipments competitive, as per policy. 'This may be a result of Trump 2.0 in as much that countries are dumping their goods in India, as they are selling less in the US. It may be required that India too may have to reciprocate, or react with anti-dumping duties in the near future on a variety of products," said Jalan. At the same time, sustained growth in the consumption tax revenue indicated positive consumer sentiments. To boost demand for goods and services in the economy, the government had announced a tax cut for middle-income earners in this year's budget which was estimated to cost the exchequer ₹1 trillion by way of forgone income tax receipts. Policymakers are also counting on above-normal monsoon, strong agriculture growth, growth supportive monetary policy and government capital expenditure to support economic growth this year. Also read: Lenders willing to offer lower rates to distressed firms since IBC took effect, says insolvency board M.S. Mani, partner indirect taxes, Deloitte India, said that tax collection in May which is better than the average monthly GST receipt in the last financial year, would provide significant fiscal headroom for the government. After refunds, the Central government collected over ₹31,000 crore, while states collected over ₹38,500 crore. Cess on luxury goods, aerated drinks and tobacco yielded ₹12,400 crore in May.
Axios
4 days ago
- Business
- Axios
DOE scuttles $1B in Texas clean energy funding
The U.S. Department of Energy has canceled $3.7 billion in clean energy projects nationwide, including more than $1 billion tied to facilities in Texas. Why it matters: The elimination of the 24 projects created under the 2021 bipartisan infrastructure law is among the biggest and most specific cases yet of Trump 2.0 officials pulling the plug on the Biden administration's unprecedented subsidies for low-carbon energy. Context: The department was aiming to close the Office of Clean Energy Demonstrations and terminate nearly half its awarded funding, Axios Pro reported last month. Driving the news: The terminated support was aimed mostly at carbon capture and various other "decarbonization initiatives," DOE said in a statement. DOE alleged that Biden officials "failed to conduct a thorough financial review" and noted that 16 of the awards were "signed" between the election and President Trump's inauguration. Zoom in: Texas saw four projects terminated, including three near Houston: Calpine Texas CCUS Holdings, Baytown – $270 million. Exxon Mobil Corporation, Baytown – $331.9 million. Orsted Star P2X, Chambers County – $99 million. Eastman Chemical Company, Longview – $375 million. What they're saying: "Today, we are acting in the best interest of the American people," U.S. Secretary of Energy Chris Wright said in the announcement. The DOE said in the statement the projects "were not economically viable and would not generate a positive return on investment of taxpayer dollars." The other side:"The abrupt termination of $3.7 billion in clean energy investment is shortsighted and malicious," said Rep. Marcy Kaptur, the top Democrat on the House Appropriations Committee's energy panel. What we're watching: Other projects that could be on the chopping block.
