Group 1 - The U.S. government is experiencing a significant shutdown, lasting 25 days, which has severely impacted the service sector and delayed critical economic data releases such as non-farm payrolls and CPI [1][3] - The market is estimating that the shutdown could extend until November 11, leading to two consecutive months without non-farm payroll data, increasing the risk of policy misjudgments by the Federal Reserve [3][10] - The U.S. credit rating has been downgraded by Scope Ratings from "AA" to "AA-", reflecting concerns over high federal deficits and increased interest expenditures, amidst a politically polarized environment [3][5] Group 2 - The ongoing shutdown and credit rating downgrades highlight systemic failures within the U.S. governance structure, with rising financing costs anticipated as a consequence [5][10] - The trade policies initiated by former President Trump, particularly tariffs, have led to unintended economic pressures, including increased consumer spending and inflationary effects, despite official inflation rates remaining stable [5][7] - A legal challenge regarding tariffs is set to be debated in the Supreme Court on November 5, which could have significant implications for U.S. economic policy and the balance of presidential power [7][8] Group 3 - The combination of the government shutdown, missing economic data, and credit rating downgrades reflects a broader issue of governance inefficiency and political dysfunction in the U.S. [10][12] - If non-farm payroll data is not released by mid-November, it could create an unprecedented "data vacuum," complicating the Federal Reserve's decision-making process [12][14] - The current situation serves as a critical indicator of the U.S. economic credibility, with the potential for long-term impacts on market confidence and investment behavior [14]

Core Viewpoint - The UK government borrowing has significantly exceeded expectations due to soaring debt interest payments, putting pressure on the new Chancellor Reeves to consider tax increases to address the fiscal shortfall [1] Group 1: Government Borrowing - In June, the government borrowing reached £20.7 billion (approximately $27.9 billion), nearly 20% higher than the £17.5 billion anticipated by economists [1] - Cumulative borrowing for the first three months of the fiscal year totaled £57.8 billion, an increase of about £7.5 billion compared to the same period last year, aligning with the Office for Budget Responsibility's March forecast [1] Group 2: Debt Interest Payments - The surge in debt interest payments is the primary driver of the increased deficit, with June's interest payments amounting to £16.4 billion, marking the third-highest monthly figure in history [1] - The rise in interest payments is largely attributed to the rebound in inflation in April, which has increased the repayment costs of bonds linked to the Retail Price Index (RPI), accounting for a quarter of the UK's total debt [1]

Group 1: Rising Bond Yields - The yield on the 30-year U.S. Treasury bond rose to nearly 5.1%, the highest level in a year and a half, with a significant increase of over 0.4% since May [2][3] - Long-term bond yields are rising across Japan, the UK, and Germany, indicating a broader trend of increasing rates in the bond market [5] - The rise in yields is attributed to concerns over fiscal instability and the impact of U.S. trade policies on global supply chains and inflation [2][9] Group 2: Economic Indicators and Monetary Policy - Recent economic indicators, including April's employment data, have led to a decrease in expectations for interest rate cuts by the Federal Reserve, with some officials suggesting only one cut may occur this year [6] - In the UK, the consumer price index rose by 3.5% year-on-year, prompting discussions about the pace of future interest rate cuts by the Bank of England [8] Group 3: Fiscal Concerns and Market Reactions - The U.S. Congress is working on fiscal legislation that could lead to a significant increase in public debt, estimated at $3 trillion to $5 trillion over the next decade [10] - Concerns about fiscal deterioration are prevalent in Japan and Europe, with rising defense spending discussions contributing to increased interest rates [10] - The perception of U.S. Treasuries as a safe asset is being challenged, leading to potential shifts in investment strategies among global investors [10] Group 4: Impact on Housing and Corporate Investments - The rise in long-term interest rates is creating headwinds for investments reliant on long-term borrowing, such as housing [11] - The 30-year mortgage rate reached 6.92%, contributing to a 5% decline in mortgage application indices [11] - High interest rates may increase the risk of corporate bankruptcies, particularly for companies with heavy debt burdens [11]