Saxo Market Call Here we go again with tariffs and US fiscal focus
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May 19, 2025 US markets are feeling the pressure as tariffs loom large, impacting investor sentiment right from the start of the week. A recent downgrade of U.S. Treasuries raises concerns over fiscal stability, linked to tax cuts and spending bills. The team analyzes how these factors could affect yields and the dollar's performance. Additionally, political maneuvers surrounding tariffs could have broader implications for the nation's economic health and market dynamics. Tune in for insights on navigating this turbulent fiscal landscape!
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US Treasury Market Under Pressure
- The U.S. is facing rising Treasury yields linked to worsening fiscal deficits from the advancing Trump tax cut bill.
- This creates serious pressure on the Treasury market, possibly necessitating government intervention soon.
Tariff Threats Escalate Risks
- Renewed threats of tariffs from the Trump administration add to market concerns.
- This elevates trade tensions and undermines the market's recent optimism about pro-growth policies.
Dollar Caught Between Forces
- The US dollar struggles amid rising yields and political uncertainty, trapped between opposing forces.
- Intervention in the Treasury market could weaken the dollar through measures like yield caps or QE.