US News
LAST UPDATE: May 22, 2025
IMF urges US to curb deficit as Trump tax cut plan stirs debt fears
The IMF warns that extending Trump’s 2017 tax cuts could raise the US deficit from 6.4% to nearly 9% by 2035, with debt-to-GDP reaching 98% in 2024.
Insight
The IMF’s concerns highlight the tension between fiscal stimulus and debt sustainability. The proposed tax cuts may provide short-term economic boosts but risk long-term fiscal health, potentially affecting investor confidence and leading to higher borrowing costs.
Fed officials expect tariffs to boost prices; White House downplays risk
Federal Reserve officials anticipate that recent US import tariffs will lead to higher consumer prices, urging caution before adjusting interest rates.
Insight
The Fed’s cautious stance reflects concerns about inflationary pressures from tariffs. While the White House downplays these risks, persistent inflation could complicate monetary policy, potentially delaying rate cuts and affecting economic growth.
Fed’s Bostic Signals Longer Delay in Cutting Interest Rates
Atlanta Fed President Raphael Bostic suggests only one rate cut in 2025, citing uncertainties from tariffs and fiscal policies.
Insight
Bostic’s outlook indicates the Fed’s commitment to data-driven decisions amid economic uncertainties. Delayed rate cuts may impact borrowing costs and investment, emphasizing the need for clarity in trade and fiscal policies to guide monetary actions.
Trump’s Economic Agenda Hinges on Tax Bill That Divides His Own Party
President Trump’s proposed tax bill, including cuts for tips and Social Security benefits, faces opposition within the GOP over concerns about Medicaid cuts and increased deficits.
Insight
The internal GOP divisions underscore the challenges in passing significant fiscal legislation. Balancing tax relief with social program funding is contentious, and failure to unify could hinder the administration’s economic agenda and affect midterm election prospects.
Trump unveils plans for ‘Golden Dome’ missile shield for US
President Trump announced the “Golden Dome,” a missile defense system aimed at intercepting long-range threats, to be operational by the end of his term.
Insight
The initiative reflects a focus on national security and technological advancement. However, the project’s cost and feasibility may draw scrutiny, and its announcement could influence defense industry stocks and geopolitical dynamics.
China ‘seriously concerned’ over US Golden Dome defence system
China has voiced serious concerns over the United States’ development of the $175 billion Golden Dome missile defense system, warning that it could trigger an arms race and destabilize global strategic balance.
Insight
The criticism reflects the broader strategic rivalry between the US and China, particularly in defense and space technologies, and may influence future diplomatic and military engagements.
