Sudden Return of the Trump Trade Sends Treasurys Reeling: Investors bet that a Republican sweep would allow tax-cut extensions

Wall Street Journal ^ | 07/05/24 | Sam Goldfarb

[SeekAndFind]

President Biden wants to only extend tax cuts for households making under $400,000, letting taxes rise for those above that threshold. Administration officials say any tax-cut extensions must be offset with higher taxes on high-income households and corporations, a goal that could prove challenging even if Democrats do well in November.

[Paladin2]

I didn’t see this in T-Bill World today.

[proxy_user]

Since the Treasuries in brokerage account all show no change, I suspect there was no trading today. They’re probably taking a 4-day weekend.

[Paladin2]

Nope.

T-Bills were set for maturity on 7/5, Fri ilo the frequent Thursday [7/4].

One could also buy some today....

I think the Market was open all day.

[Theoria]

Expect another credit event next year in the form of a credit downgrade. The politicians are not serious about cutting spending. Inflation will not be handled unless with a recession.

[Neanderthal]

"Since the Treasuries in brokerage account all show no change, I suspect there was no trading today. They’re probably taking a 4-day weekend."

***********************************************

Treasury interest rates fell across the board on Friday. The 5 year fell 10 basis points or 2.41%.

[iamgalt]

“investors betting policies including tax cuts could drive up deficits and inflation.”

Never Trumper BS from WSJ. Tax cuts increase revenues every time.

[VanShuyten]

https://www.treasurydirect.gov/instit/annceresult/press/preanre/2024/R_20240703_2.pdf

The 4-week rates are @ 5.2%.

[PeterPrinciple]

A rule of thumb on Wall Street holds that budget deficits tend to be larger under one-party control.

---

a rule of thumb has exceptions

Tough times is the cure. We will see some.

It is going to take a generation to change things

[mewzilla]

Meanwhile, on the other side of the pond...

Keir Starmer dodges major question as 'two words' hint at imminent tax hikes Keir Starmer held a press conference at Downing Street after Labour's landslide General Election win - with two key words hinting at tax rises.

The EU's cash cow is back in the barn!

[Wuli]

Making the 2017 tax cust permanent has to also include deep federal budget cuts at the same time. The borrowing binge cannot continue.

[Neanderthal]

"The 4-week rates are @ 5.2%."

********************************************

Yes. I said the 5 year fell by 10 basis points, from 4.322% on Thursday to 4.218% on Friday. That is a drop of 2.41%.

[cgbg]

I am staying short term on this stuff—regardless of how the politics goes.

The reason is that if there is major inflation there will be plenty of opportunity to lock in much higher long term rates.

If there is not major inflation then my cost of living does not rise substantially so all is good.

[DNME]

Will Trump capitalize on the overturn of the Chevron doctrine and FINALLY start dismantling the Federal Behemoth?

[SunkenCiv]

IOW, same partisan media gaslighting, different day.

• Simply Unaffordable! Home Affordability in the US Sinks to Lowest Point Since 2007, Home Prices UP 35%, Mortgage Rates UP 148% Under Biden (Mortgage Purchase Applications DOWN 12% [07/03/2024]
• Wasting Away Again In Bidenville! US New Home Sales Crashed In May (Near 7% Mortgage Rates Aren't Helping) [06/27/2024]
• Credit card rates at 21.47%, debt over $1 trillion, inflation pressures intensifying consumer troubles. [06/27/2024]
• Better Off Than 3 1/2 Years Ago? Home Prices Up 34% Under Biden (Rising Property Taxes And Home Insurance), Mortgage Rates Up 147%, Rent CPI Up 5.3% [06/24/2024]
• Fed holds rates steady, indicates only one cut coming this year [06/12/2024]
• Mortgage rates tick down, back below 7% [06/07/2024]
• US Pending Home Sales Plunge To Record Lows In April As Rates Rose (After Terrible Mortgage Report) [05/30/2024]
• FED Warns Against Rising Delinquency Rates, Calls It A "Leading Indicator That Things Are About To Get Worse [05/29/2024]
• Simply Unaffordable? US Home Prices Reached New Record High In March, Despite Soaring Mortgage Rates (Home Prices UP 34.5% Under Biden, Mortgage Rate 157%) [05/28/2024]
• Bidenomics Warning! Fed's Favorite Inflation Indicator Prints Hotter-Than-Expected As Savings Rate Plunges (Govt Wages Rose To 8.5% YoY, Private Sector Wages Up 5.5% YoY) [04/26/2024]
• Wall Street Journal: Biden's Migration Spikes Interest, Mortgage Rates [05/13/2024]
• Rents in these US cities are rising faster than wages — with NYC hit the worst [05/09/2024]
• Surprise! Citi Economic Surprise Index Crashes To -7.30 (Home Prices UP 32% Under Biden, Mortgage Rates UP 160%) [05/04/2024]
• The most dysfunctional state in America? Soaring unemployment, sky-rocketing debt and punishing taxes send residents fleeing (Illinois) [05/03/2024]
• Housing Crisis Escalates: Rents Outpace Wages in 197 U.S. Counties, Debt Burdens Rise, and Bankruptcy Filings Surge [01/30/2024]

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• 'We just can't take this anymore': Montana man, 68, begs for 'moratorium on property taxes' after his bill reaches $8K a year just 'to live in our own house' [06/11/2024]
• Hundreds of nursing homes in Florida forced to close due to surging property insurance rates [05/20/2024]

[GOPJ]

Any news today on this issue?

[Paladin2]

I only looked at offered rates [3 through 9 months] today for a couple of minutes.

Rates still seem to be largely unchanged.

Thursdays are when most of my T-Bill ladder rungs mature, so I’ll be looking closer on 7/11.

[central_va]

with investors betting policies including tax cuts could drive up deficits and inflation.

One problem, that is not what happens. Revenue goes up and there is no effect on inflation.

[central_va]

Tax cuts increase revenues every time.

bump

[central_va]

Revenue and spending are totally seperate issues and IMO need to be treated as such.