House Speaker Mike Johnson announced that Republicans have agreed to raise the state and local tax (SALT) deduction cap to $40,000, potentially resolving a key issue in President Trump’s economic bill.

The Boston Fed warns that banks’ increasing exposure to the $1.6 trillion private credit market, through financing non-bank lenders, could pose systemic risks, especially during economic downturns.

Former President Donald Trump is contemplating an executive order to allow private equity firms access to the $9 trillion US retirement market, potentially increasing investment options but also risks for savers.

The White House criticized Republican holdouts for not supporting President Trump’s tax bill, calling the failure to pass it the ‘ultimate betrayal,’ as internal GOP divisions threaten the legislation’s success.

House Speaker Mike Johnson announced that Republicans have reached an agreement to increase the state and local tax (SALT) deduction cap to $40,000. This move aims to garner support for President Trump’s tax bill by appealing to lawmakers from high-tax states. The agreement is part of broader negotiations to pass the tax legislation.

Economists from the Federal Reserve Bank of Boston warn that increasing bank loans to private-credit firms may threaten financial system stability. As private-credit firms and business development companies (BDCs) expand, banks are increasingly financing their risky lending activities, exposing themselves indirectly to higher-risk borrowers that banks normally avoid. Although banks have senior creditor status, making them among the first to be repaid in financial distress, they could still face significant losses under severe economic conditions.

The Trump administration is considering an executive order to allow U.S. retirement plans, particularly 401(k)s, to invest in private equity and other private capital markets. This could potentially open up the nearly $9 trillion retirement market to large private capital firms like Blackstone, Apollo, and KKR. While Trump initiated steps during his first term to enable such access, concerns over legal liabilities have largely held firms back. The proposed order would direct federal agencies like the SEC and the Departments of Labor and Treasury to examine the feasibility and regulatory implications of this move.

The White House has labeled the failure to pass the proposed tax bill as the “ultimate betrayal,” emphasizing the importance of the legislation to President Trump’s economic agenda. The bill includes provisions such as the SALT cap increase and aims to unify Republican support. However, internal disagreements and concerns over certain aspects of the bill have posed challenges to its passage.