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Yahoo
8 hours ago
- Business
- Yahoo
Trump Tariffs Get Seal of Approval as S&P Affirms Credit Rating
(Bloomberg) -- President Donald Trump's sweeping tariffs have roiled markets, unnerved trade partners and provoked criticism from leading economists. But there is an upside: The levies will help the US maintain its fiscal health, according to S&P Global Ratings. The credit rating company has affirmed its AA+ long-term rating for the US, in part because it thinks tariff revenues will reduce the fiscal hit of a recent tax and spending bill. It kept the outlook for the long-term rating stable. A Photographer's Pipe Dream: Capturing New York's Vast Water System Chicago Schools Seeks $1 Billion of Short-Term Debt as Cash Gone A London Apartment Tower With Echoes of Victorian Rail and Ancient Rome Festivals and Parades Are Canceled Amid US Immigration Anxiety Princeton Plans New Budget Cuts as Pressure From Trump Builds The decision offers a glimmer of good news for Trump, who has pushed back against arguments that his historic program of tariffs will damage the US economy. Although the S&P analysts didn't contradict that view, they stressed that as Trump embarks on a bold program of tax cuts and spending, tariffs will help soften the blow. 'Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending,' wrote analysts including Lisa Schineller in a note. S&P's views matter for investors in the world's biggest bond market, which has been plagued by persistent questions over the fiscal deficit and debt sustainability. Yields on 30-year Treasuries jumped above 5% in May as tariff fears and Trump's multi-trillion dollar tax bill roiled global markets. Buy America Whether tariffs will give the US a meaningful revenue boost is a subject of debate among economists, who point to an apparent contradiction at the heart of Trump's approach: Tariff revenues rely on trade, but Trump has also attempted to pull production back to the US and encourage consumers to buy American-made products — moves that would undercut future levy receipts. The White House didn't immediately reply to an out of hours request for comment. So far, the numbers are strong. Tariff revenue reached a fresh monthly record in July, with customs duties climbing to $28 billion. Treasury Secretary Scott Bessent said tariff revenues for all of 2025 could be 'well in excess of 1% of GDP,' revising his previous estimate of $300 billion. But the bipartisan Congressional Budget Office estimates the recently passed budget bill will add $3.4 trillion to the deficit over the next 10 years. US 30-year yields were close to flat around 4.94% in Asia trading Tuesday, while those on benchmark 10-year yields edged higher to 4.34%. That pointed to a muted short-term impact from the S&P report, even if it adds an important voice as traders weigh up the impact of tariffs over the coming months. 'These are still small nuances close to the top of the credit ratings hierarchy and it doesn't signal any material change in the US fiscal health, which is a complex issue,' said Homin Lee, senior macro strategist at Lombard Odier Ltd. in Singapore. What Bloomberg Strategists Say... 'The pressures on the Fed to again consider defying rates markets and hold next month just received a (rather modest) boost as S&P Global Ratings delivered a solid report card for the US's economy and outlook.' Garfield Reynolds, MLIV Team Leader. Read more on MLIV. The US lost its last top rating from the big three credit companies in May, when Moody's Ratings lowered the country from Aaa to Aa1. It blamed successive administrations and Congress for swelling budget deficits that it said show little sign of abating. Fitch Ratings and S&P had previously downgraded the US from AAA. S&P said the stable outlook indicates its expectation that while the fiscal deficit won't meaningfully improve, it also won't persistently deteriorate over the next several years. The agency expects net general government debt to surpass 100% of GDP over the next three years, but it thinks the general government deficit will average 6% from 2025 to 2028, down from 7.5% last year. The rating affirmation could be a positive for the dollar after Trump's tax and spending bill cast doubts on the sustainability of US debt, said Fiona Lim, a senior currency strategist at Malayan Banking Bhd. Still, the more lasting driver for the greenback will come from Federal Reserve minutes, as well as Fed Chair Jerome Powell's speech in Jackson Hole on Friday, she said. A gauge of the dollar edged higher during Asia trading hours on Tuesday. --With assistance from Matthew Burgess. Foreigners Are Buying US Homes Again While Americans Get Sidelined What Declining Cardboard Box Sales Tell Us About the US Economy Women's Earnings Never Really Recover After They Have Children Americans Are Getting Priced Out of Homeownership at Record Rates Yosemite Employee Fired After Flying Trans Pride Flag ©2025 Bloomberg L.P. 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
CBS News
7 days ago
- Business
- CBS News
2 candidates for mayor of Pittsburgh talk budget challenges facing city
Amid questions surrounding Pittsburgh's budget challenges, the two candidates for mayor shared what they think needs to be done. It looks like a perfect storm: city vehicles on their last legs backed up at the repair garage, understaffing of police and paramedics resulting in burnout, runaway overtime, and concerns about the public's safety. At the same time, federal COVID-19 relief funds are drying up, and Downtown building assessments are falling. Pittsburgh City Controller Rachael Heisler says the city needs to level with the public and address the situation head-on. "We need to be more practical and honest with city residents, city businesses and city stakeholders about the fiscal health of the city, and I think we need to demonstrate some capacity for cost containment, look at places where we can grow city revenue, and start there," Heisler said. Mayor Ed Gainey's administration declines to call the situation a crisis, saying it's spent more money on vehicles than past administrations, has stepped up recruiting, and is trying to rein in overtime. Deputy Mayor Jake Pawlak said the financial reserves are healthy, but the administration is analyzing the situation and won't rule out a tax increase when it introduces its final budget next month. "Despite a popular narrative to the controversy, we take these decisions very seriously and we believe that we have a responsibility to make informed decisions with data," Pawlak said. The two candidates for mayor would like to avoid increasing taxes or laying off staff, but they say drastic steps are needed. First, by cutting what they see as wasteful spending. Republican candidate Tony Moreno said that money needs to be redirected to essential services. "If we can reprioritize those monies that are being wasted, we know that there's waste, we know that they're misspending money," Moreno said. Heisler has targeted unspent money in the city's $10 million-per-year affordable housing fund and singled out $16 million in Stop the Violence grants slated for community organizations. Corey O'Connor, the Democratic candidate for mayor, says he'll look at all spending with a fine-toothed comb, specifically the administration's penchant for consultant studies, including a $6 million comprehensive plan. "Are there contracts that we don't need anymore?" O'Connor said. "Are there contracts that are citywide that are millions of dollars that we've already done studies on before? How do we get back to the basics of running government again?" The Gainey administration has focused on affordable housing, but developers have complained that roadblocks and a lack of incentives have thwarted their projects. Both Moreno and O'Connor say the fiscal situation won't be fixed without growing the city with new residents and new tax revenues in a more business-friendly environment. "We're not focusing on growth and opportunity," O'Connor said. Lastly, both candidates believe they will succeed in getting payments in lieu of taxes from the city's non-profit hospitals and universities. But the city may be facing a deficit in the tens of millions of dollars and might need every cent to avoid hitting property owners with higher taxes.
Yahoo
06-08-2025
- Business
- Yahoo
Voter confidence in U.S. fiscal outlook falls to 13-month low: survey
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Confidence among voters in the fiscal health of the U.S. fell in July to the lowest level in 13 months after passage of the Trump administration's massive tax-and-spending bill, the Peter G. Peterson Foundation said. Nearly six out of 10 voters (59%) believe the U.S. is on a risky fiscal path, and 61% expect the nation's debt burden to grow heavier during the next few years, the Peterson Foundation said, citing a survey. The recently enacted legislation will push up the national debt by $4.1 trillion by the end of 2034, according to the Congressional Budget Office. 'Voters are making clear that it's time to stop digging the hole deeper, and want their leaders to take action to stabilize the debt and create a sustainable budget outlook,' Peterson Foundation CEO Michael Peterson said in a statement. 'America currently spends more on interest on the debt than on national defense or Medicaid, and interest costs are also growing faster than both.' Dive Insight: The survey suggests that the Trump administration has not persuaded most voters that the recently enacted legislation — focusing on cutting taxes and scaling back healthcare and social welfare programs — improves the nation's long-term budgetary outlook. Office of Management and Budget Director Russell Vought has repeatedly said that CBO and other estimates are flawed and that the legislation will trim the federal deficit by $1.4 trillion by 2034. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership 'If you care about deficits and debt, this bill dramatically improves the fiscal picture,' Vought said on X in June, referring to the reconciliation bill. Before the July enactment of the legislation, the Government Accountability Office calculated that the public debt will rise from 98% of GDP in September to a record 106% of GDP by 2027. The Trump administration, citing its fiscal program, paints a more optimistic picture. 'President Trump's pro-growth economic policies and reining in wasteful spending are key to improving the fiscal outlook,' the White House said in June. Trump's 'proven economic formula — historic tax relief, rapid deregulation, balanced trade and reining in wasteful spending — will slash our debt down to just 94% of GDP' by 2034. Both Democrats and Republicans, including those in the White House, acknowledge the urgency of putting the U.S. on a sustainable budgetary path. Before passage of the Trump-backed legislation, EY and Peterson estimated that by 2035 the rising national debt would undermine the size of the economy by $340 billion, cut the number of U.S. jobs by 1.2 million and set back private investment by 13.6%. Also, U.S. CEOs identified the nation's debt as 'a ticking time bomb' before President Donald Trump took office in January, the Conference Board said. More than half of CEOs (51%) considered the national debt and deficits as the No. 1 external risk for their businesses, the Conference Board said in January, citing a survey. With rising federal debt, the increase in federal government borrowing pushes up the cost of capital and 'crowds out' private sector borrowing, inhibiting innovation and business investment, according to economists. The murky fiscal outlook, affirmed by downgrades by all three major credit ratings firms, complicates corporate planning, prompting delays in hiring and investment. Reducing the federal debt should be among the top three priorities for Trump and Congress, according to 80% of voters surveyed by the Peterson Foundation, including 83% of Republicans. In June, 76% of voters held that view. The Peterson Foundation commissioned the poll of 1,003 registered voters nationwide between July 21 and July 23. 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
Yahoo
24-07-2025
- Business
- Yahoo
Jim Cramer is 'worried' for his kids amid soaring debt
Jim Cramer is 'worried' for his kids amid soaring debt originally appeared on TheStreet. With U.S. national debt surpassing $38 trillion, market commentators and policymakers are responding to the rising fiscal burden. CNBC host Jim Cramer said on air that some investors are buying Bitcoin "as a hedge" against increasing debt, pointing to his concerns about what I call the decline in the long-term fiscal health of the country for younger people. "I don't want that debt. I'm worried about my kids," Cramer stated during a segment on CNBC on July 23. The big beautiful bill The comments are also being made amid a climb in U.S. Treasury yields that has shown how investors are feeling anxiety over inflation and the kind of spending from government the U.S. will experience. As some in markets look toward digital assets as alternative stores of value, others are considering certain economic policy levers intended to stimulate productivity and investment. The Trump administration has been talking a lot about the One Big Beautiful Bill Act (OBBBA), a big tax and spending law that lets businesses fully deduct capital expenses (CAPEX) that happened before January per Fox News, Senior officials and Treasury Secretary Scott Bessent say that the provision has led to a rise in corporate investment. The Treasury Department says that capital spending went up by 16.6% in the first half of 2025. In the second quarter, the production of business equipment rose 11%, following a 23% rise in the first quarter. The government states that this policy aligns with its tariff and trade strategy to bring manufacturing back to the U.S. and help raise wages. Officials say that this combination could help lessen the effects of long-term debt by boosting productivity and investment in the country. At the same time, more and more investors are adding digital assets to their portfolios to spread out their risk. It is worth noting that Cramer has frequently expressed skepticism about Bitcoin in the past. Since early 2025, Cramer has changed his stance. For example, in early 2024, Cramer said it was "unlikely that Bitcoin finds its footing," which was a bad prediction that was quickly forgotten when BTC rose more than 150% after that. Jim Cramer is 'worried' for his kids amid soaring debt first appeared on TheStreet on Jul 23, 2025 This story was originally reported by TheStreet on Jul 23, 2025, where it first appeared. 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
Zawya
04-07-2025
- Business
- Zawya
Japan July 20 election results could impact fiscal health, ratings, Moody's says
TOKYO - Japan's upcoming upper house election could have important implications for fiscal health and credit ratings if it brings large tax cuts, Moody's Ratings said. The July 20 vote is crucial for the continuity of Prime Minister Shigeru Ishiba's administration, especially after his ruling Liberal Democratic Party (LDP) and coalition partner Komeito lost their majority in the lower house at a snap poll in October. The coalition plans to include cash handouts in their campaign pledges to help households cope with inflation, but has resisted calls from opposition parties for tax cuts. If tax reduction pressure increases in connection with the election, it could be negative for the country's rating, depending on how large and long-lasting the cuts are, said Christian de Guzman, a manager with Moody's Sovereign and Sub-Sovereign Risk Group. Moody's has rated Japan A1, the fifth-highest level, with a "stable" outlook since December 2014. In May, the agency stripped its top rating from the United States, citing the nation's growing debt and widening fiscal deficit. Japan's debt burden is significant, with the country's debt-to-gross domestic product (GDP) ratio the highest in the developed world, at about 250%. The Japanese government bond market got a jolt in May when fiscal concerns and poor demand at debt auctions triggered a plunge in super-long bonds, sending yields to record levels. Even so, Japan has strong "debt affordability," as its domestic borrowing rates are low and tax revenue is sufficient to service the debt, Singapore-based de Guzman said. "There have been some positive trends with regards to government revenue, but what would perhaps compel us to rethink our rating is if there is a very material deterioration in debt affordability," he added. The surge in long-term JGB yields in May was more of a global phenomenon, and a more worrying trend would be if Japan saw an large increase in rates across its yield curve, according to de Guzman.
