President Trump’s new tax legislation has wrought a period of extreme volatility within the unstable U.S. Treasury market. Initially that triggered a selloff among Treasuries themselves, i.e. Market focus turned away from Fed sentiment and toward upcoming U.S. economic data. Consequently, the early volatility gave way to a calmer and highly bullish market setting.
In this market shift, the Senate’s changes to the tax bill were very significant. These amendments expanded tax breaks for all sectors, including tribal, in hopes of creating jobs and fostering economic development. Additionally, the revisions reinstated funding for certain programs that had been previously cut, which some analysts view as a positive move for the economy.
Despite these positive developments, concerns remain regarding the potential impact of increased deficits resulting from the tax cuts. Economists are cautioning that the widened tax breaks and increased program appropriations could lead to bigger budget deficits. This should set off alarm bells across the bond market. Investors are understandably worried about what these possible shortfalls might do to interest rates and market disruption.
That being said, developmental financial residents of the United States, Australia, or Singapore are out of luck. So picture this as you read in to learn more! In these regions, local policies and regulations impose severe limitations on foreign exchange (FX) trading. Many go so far as to ban contracts for difference (CFD) trading outright. This regulatory environment poses significant barriers that severely restrict the ability of residents in these countries to engage in the global financial markets.
The market is still jittery over the effects of President Trump’s ill-conceived tax legislation passed last year. Both economists and investors have their eyes firmly fixed upon the coming economic indicators. Tax policy, market sentiment, and economic performance will all help determine the financial prospects. So stay tuned for some big changes over the next few months.