US News
LAST UPDATE: July 4, 2025
Trump wins broad economic policy shift as House passes tax bill
The House approved the “$3.4 trillion One Big Beautiful Bill,” extending Trump-era tax cuts, increasing defense and immigration spending, and imposing cuts to Medicaid/SNAP.
Insight
The bill embodies a major fiscal pivot toward conservative priorities: favoring the wealthy, boosting security, and diminishing social programs while significantly increasing the deficit.
IMF says US tax, spending bill runs counter to deficit-cutting advice
The IMF criticized a Republican-backed US tax and spending bill for increasing the fiscal deficit, warning it runs counter to its advice for medium-term deficit reduction. Treasury Secretary Scott Bessent defended the bill, saying it would boost growth and revenue. (reuters.com)
Insight
This highlights a key disconnect: Washington emphasizes growth, while the IMF stresses fiscal discipline. The outcome could influence future IMF recommendations and U.S. credibility in global fiscal governance.
Steady job market keeps Fed on hold amid tariff uncertainty
U.S. firms added 147,000 jobs in June and unemployment dipped to 4.1%. Despite robust figures, the private-sector share of gains was modest and uncertainty from impending tariffs may keep the Fed from cutting rates in July.
Insight
The data reinforces the Fed’s patient stance: strong headline employment provides cover for a hold pattern, but uncertainty from trade policy warnings may delay rate cuts, pointing to a slower easing cycle.
US services activity bounces back, but jitters remain
ISM’s June services PMI rose to 50.8, marking modest growth after contraction, but employment in the sector weakened amid lingering tariff and trade uncertainties.
Insight
The rebound indicates demand remains intact, but slack job creation shows firms hesitant to invest in uncertain conditions. This mixed signal supports the Fed’s cautious approach toward rate decisions.
Trump administration will focus on Fed chair replacement in fall, Bessent says
Treasury Secretary Scott Bessent said the Trump administration will prioritize selecting a replacement for Fed Chair Jerome Powell this fall, with qualified candidates under discussion. Powell’s term ends in May 2026, and the nomination process is expected after Labor Day.
Insight
This underscores Trump’s intent to influence monetary policy by installing a dovish Fed chair aligned with his rate-cut preferences. It also reflects legal constraints: Powell can’t be removed early, so the focus shifts to successor timing. (reuters.com, reuters.com)
Bessent Says Trump to Decide on Any Extension of July 9 Tariff Deadline
U.S. Treasury Secretary Bessent said President Trump will decide whether to extend the July 9 tariff deadline, suggesting leniency may be granted to countries negotiating in good faith.
Insight
Trump’s control over trade escalation emphasizes political leverage in bilateral talks. The outcome affects China, EU, and others, reinforcing uncertainty in global supply chains.
