The US Treasury Secretary Bessent has unveiled a strategic economic initiative, the 3-3-3 programme, aimed at reducing the fiscal deficit to 3% of GDP, increasing oil production by 3 million barrels per day, and achieving an economic growth rate of 3%. This ambitious programme was introduced in the lead-up to last year's elections, signaling a robust plan to stabilize and invigorate the US economy. While President Trump refrains from pressuring the Federal Reserve to lower interest rates, the administration holds several strategic advantages, such as the potential permanence of the 2017 tax cuts.
In tandem with these developments, the US Treasury has announced its plan to maintain the February 30-year Treasury Inflation-Protected Securities (TIPS) auction size at $9 billion. Furthermore, the Treasury will increase the 10-year auction size to $18 billion in March and the 5-year auction size to $25 billion in April. This move is part of a broader strategy to manage the national debt and support economic growth.
Meanwhile, Italy's budget watchdog, UPB, has revised its growth estimates for the country, lowering them from 1% to 0.8% for this year. This adjustment highlights Italy's vulnerability, particularly due to its reliance on gas imports, which accounts for approximately 95% of its annual consumption. Such dependency makes Italy susceptible to energy market fluctuations and external economic pressures.
The Bank of England (BoE) is poised to reduce its key interest rate by 25 basis points to 4.50% following its February policy meeting. This anticipated rate cut is aligned with broader global financial trends as central banks navigate complex economic landscapes. The Federal Reserve remains committed to a hawkish monetary policy, prioritizing measures to counteract inflationary threats.
The US Treasury is set to commence the funding quarter with a significant $125 billion sale next week. This includes a $58 billion 3-year note, a $42 billion 10-year note, and a $25 billion 30-year note sale. The Treasury's strategic approach in managing these auctions reflects its efforts to balance fiscal responsibilities with economic growth objectives.
Looking ahead, the US Treasury plans to review its growth estimates in April, providing further insights into the economic trajectory. The European Union (EU) emerges as a potential target for new tariffs under President Trump's trade policies. Such measures could alter trade dynamics and have far-reaching implications for international relations.
"He (Trump) is not calling for the Fed to lower rates."
- US Treasury Secretary Bessent
This statement by Secretary Bessent underscores the administration's current monetary policy stance, emphasizing a preference for maintaining existing interest rates.
"We cut the spending, we cut the size of the government and we get more efficiency in government."
- US Treasury Secretary Bessent
Bessent's remarks further highlight the administration's focus on fiscal discipline and governmental efficiency as key components of their economic strategy.