Core Insights - U.S. inflation has consistently remained above the 2% target for several years and has recently diverged further from this target [1] - The Federal Reserve is planning to implement monetary policy easing through interest rate cuts despite the ongoing inflation [1] Inflation Trends - Inflation in the U.S. has been above the 2% target for years, indicating persistent inflationary pressures [1] - In the last three months, inflation has moved even further away from the target, suggesting a worsening situation [1] Federal Reserve Actions - The Federal Reserve is considering easing monetary policy, which may include rate cuts, in response to the current economic conditions [1] - This approach indicates a shift in strategy despite the high inflation rates, reflecting a focus on stimulating economic growth [1]

>> THIS IS BALANCE OF POWER LIVE FROM WASHINGTON, D. C. JOE: FROM BLOOMBERG'S WASHINGTON, D.C. STUDIOS TO OUR TV AND RADIO AUDIENCES WORLDWIDE, WELCOME TO BALANCE OF POWER. TYLER: TONIGHT, A RETURN TO REGULAR ORDER OR A SHUTDOWN SHOWDOWN IN THE MAKING.AFTER MONTHS OF PARTISAN BATTLES, THE SENATE IS TRYING TO FIND A WAY TO COME TOGETHER AND FUND FEDERAL AGENCIES AHEAD OF A SEPTEMBER 30 DEADLINE. WILL DEMOCRATS MAKE GOOD ON THE PROMISE TO HOLD REPUBLICANS ACCOUNTABLE FOR THE PRESIDENT'S TAX AND SPENDING BILL. ...

Inflation and Tariffs - The White House Council of Economic Advisers found no evidence that tariffs are leading to significant price pressures for imported goods; instead, they observed the opposite trend in inflation data [2][3] - Since December, overall goods prices in the PCE data have increased by approximately 0.4%, while imported goods prices have decreased by about 0.1% [2] - Domestically produced goods have experienced more inflation than imported goods, further supporting the absence of tariff-driven inflation [4][6] - Despite concerns about future inflationary effects from tariffs, high-frequency data and academic research have not shown any sustained pattern of tariff-driven price pressures [7] - Volatility in inflation data is possible, but the long-run expectation is that foreign countries being tariffed will bear the burden [9][10] Economic Policy and Deficit - The administration's policies, including tax cuts, deregulation, and energy abundance, are projected to increase GDP by about 1% per year over 10 years, generating approximately $4 trillion in revenue [29] - Additional revenue is expected from tariffs ($3 trillion) and spending reductions ($1.5 trillion), contributing to an estimated $8.5 trillion to $11 trillion reduction in deficits over a 10-year period [29][30] - Reduced borrowing due to these savings is projected to lower interest expenses by about $1.5 trillion [30][31] - The "one big beautiful bill" aims to incentivize investment through full expensing on new factories, equipment, and R&D, allowing firms to choose investments based on market knowledge [24] - Government intervention in predicting consumer preferences and directing industrial policy is viewed as less effective than allowing market-driven investment decisions [22][23][24]

Fiscal Policy & Debt - The industry expresses concern about the rise of Modern Monetary Theory, which suggests debt doesn't need to be repaid if a country can print money, particularly with the US as the reserve currency [1] - The industry believes that mounting levels of debt and deficit spending are unsustainable [1] - The industry suggests the US government needs to be able to sustain itself, especially as the cost of interest for the Treasury is increasing [2] Bond Market & Risk - The industry anticipates significant issues among bond buyers due to accumulating debt and rising interest costs [2] - The industry observes that the term premium has increased, reflecting a sense of more risk associated with the US due to increased spending [2] - The industry advocates for fiscal conservatism to address these concerns [2]

RT Mario Nawfal (@MarioNawfal)🚨 🇺🇸 MIND-BLOWING FEDERAL BUDGET BREAKDOWN: $6.16 TRILLION SPENDING VS $4.47 TRILLION REVENUEThe government's fiscal 2023 numbers reveal massive deficit spending that would make any sane business owner cringe.Social Security dominates spending while individual income taxes carry the revenue load.The deficit gap is staggering — we're spending $1.69 trillion more than we bring in annually.Interest payments on existing debt alone consume hundreds of billions that could fund actual ...

Bond Market Dynamics - The bond market is experiencing uncertainty due to government borrowing, trade wars, and tax cuts [2] - Long bonds, particularly those maturing in 30 years or more, are at the center of concerns [4] - Volatility in the bond market has increased, with yields on long bonds spiking above 5%, nearing the highest since 2007 [6] - Investor demand for long bonds has disappeared, resembling the volatility of meme stocks or crypto [13] Fiscal Policy and Debt - The US is projected to incur another $22 trillion deficit over the next 10 years [3] - Concerns about fiscal spending are driving long-term interest rates up, requiring higher yields to compensate for risk [14] - Government fiscal deficit problems are a ticking time bomb, leading to higher, longer-term yields [22][23] Global Implications - A global movement of rates higher has been observed [18] - Volatility in long-term bonds poses a problem for governments, as investors demand higher yields [20] - Higher yields will affect housing affordability, auto loans, student loans, and credit card rates [21] - The selloff in longer term bonds shows investors that major governments have a huge fiscal deficit problem [22] Long Bond Specifics - Long bonds were popular when investors sought decent yields due to near-zero or negative interest rates in Europe and Japan [8] - Austria Century Bonds, maturing in 2120, have seen their price fall about 75% from their peak in 2021 [12] - Rising long-end yields have increased by some 50 basis points, signaling potential financial stress [7]