Bloomberg Surveillance The Tax Bill and Treasury Auction
21 snips
May 22, 2025 Russ Brownback, Head of Global Macro Positioning for Fixed Income at BlackRock, shares insights on treasury yield warnings and how recent lackluster auctions may signal trouble for markets. Meanwhile, Terry Haines, founder at Pangaea Policy, provides a critical analysis of the tax bill vote, discussing the Senate's approach to the House's changes. The conversation reveals the potential impacts of increased deficits on investor appetite and overall economic growth, while highlighting the legislative maneuvering involved in tax policy.
AI Snips
Chapters
Transcript
Episode notes
Fiscal Stimulus Offsets Tariff Impact
- The reconciliation bill offers modest fiscal stimulus that can offset tariff impacts temporarily.
- Growth could exceed 1% this year despite tariffs weighing the economy down by about 70 basis points.
Tariffs Partially Offset Deficits
- Tariffs bring in $300 to $400 billion annually, helping offset deficits but not enough to eliminate them.
- Deficits remain high at 6-7% over the next decade, far above target levels.
Bill Reduces Fed Cut Odds
- The reconciliation bill lowers the odds of Federal Reserve rate cuts this year due to reduced economic uncertainty.
- Fiscal stimulus alongside tariff rollbacks supports consumer spending and economic growth beyond 2% next year.