US News
LAST UPDATE: May 24, 2025
US Treasuries sell-off remains orderly, IMF says
The IMF stated that despite recent volatility, the U.S. Treasury market remains orderly. This follows a rise in long-term bond yields triggered by Moody’s downgrade of the U.S. credit rating and discussions over a major tax bill.
Insight
The IMF’s assessment provides reassurance about the stability of the U.S. Treasury market, even amid fiscal uncertainties and market fluctuations.
US House passes Trump’s showpiece tax bill
On May 22, 2025, the U.S. House narrowly passed President Trump’s significant tax bill by a 215-214 vote. The legislation extends 2017 tax cuts, reduces taxes on tips and overtime, and cuts welfare programs like Medicaid.
Insight
The bill’s passage represents a major legislative victory for Trump but raises concerns about increasing the national debt and potential economic implications.
What Donald Trump’s ‘big, beautiful’ budget bill means for the US economy
Trump’s “One, Big Beautiful Bill Act” extends 2017 tax cuts, boosts child tax credits, and allocates $50 billion for border security. To offset costs, it includes significant cuts to Medicaid and other programs.
Insight
Economists warn the bill could add $3.3 trillion to the national debt over the next decade, raising concerns about long-term fiscal sustainability.
Fed’s Waller: Tax Bill Appears to Be Driving up Borrowing Costs
Federal Reserve Governor Christopher Waller indicated that rising U.S. Treasury yields are driven by market concerns over the lack of fiscal restraint in the newly passed tax-and-spending bill.
Insight
The absence of fiscal discipline in the legislation is pushing up borrowing costs, reflecting market apprehension about increased government debt.
Trump Tax Bill Faces Likely Changes, Delays in Senate
The Senate is expected to make significant changes to President Trump’s tax bill, with Senator Ted Cruz indicating that the bill will undergo considerable modifications.
Insight
The anticipated revisions and delays in the Senate highlight the complexities of passing major fiscal legislation and the potential impact on the U.S. economy.
Jobless Claims Fell Last Week
In the week ending May 17, 2025, initial jobless claims in the U.S. decreased by 2,000 to 227,000, indicating a stable labor market. However, continuing claims rose to 1.9 million, suggesting that while layoffs remain low, rehiring is slowing.
Insight
The decline in new claims reflects employer caution in reducing staff amid economic uncertainties, but the rise in continuing claims may point to challenges in reemployment, potentially due to policy shifts and trade tensions.
US business activity improves in May; inflation poised to accelerate sharply
U.S. business activity expanded in May 2025, with the S&P Global Composite PMI rising to 52.1, driven by a temporary easing of trade tensions with China. However, input prices surged, leading to concerns about accelerating inflation.
Insight
While the rebound suggests economic resilience, the sharp rise in costs and declining employment indicators raise the risk of stagflation, posing challenges for the Federal Reserve’s monetary policy.
Trump’s Next Hurdle: The Bond Market Hates His ‘Beautiful Bill’
The yield on 30-year U.S. Treasury bonds surpassed 5% following the House’s passage of President Trump’s significant tax-and-spending bill, reflecting investor concerns over increased government borrowing.
Insight
The bond market’s reaction underscores apprehensions about fiscal sustainability, suggesting that the proposed tax cuts and spending increases may lead to higher borrowing costs and potential economic instability.
White House’s Miran Says No Secret Currency Pact in Trade Talks
White House Chief Economist Stephen Miran denied allegations of a secret agreement to weaken the U.S. dollar in trade negotiations, emphasizing the administration’s commitment to a strong currency policy.
Insight
The clarification aims to reassure markets and international partners about the U.S.’s monetary stance, maintaining credibility amid ongoing trade discussions.
Trump administration blocks Harvard’s ability to enroll international students
The Trump administration revoked Harvard University’s certification to enroll international students, citing concerns over campus antisemitism and alleged ties to foreign entities. The move affects approximately 6,800 students and has prompted legal challenges from the university.
Insight
This action reflects the administration’s broader efforts to influence academic institutions and immigration policies, raising debates over academic freedom, due process, and the role of higher education in U.S. society.
