Trump-era corporate tax cuts should not be reversed

Evergrande, Fantasia, Sinic and now Modern Land: the list of Chinese real estate developers unable to repay their USD debt on time is growing. This is a reminder that China’s real estate market cleanup is just beginning and will have, at best, lasting negative consequences on growth.

In the US, it appears that the repeal of Donald Trump’s corporate tax cuts is definitely off the table. The Biden administration’s social plan would be considerably reduced compared to the initial project and should be partly financed by a tax on the wealth of the richest and the elimination of tax loopholes. The equity markets continue to applaud while long term bond yields are leveling off: the 10 year US yield is down to 1.63% from 1.7% last Thursday. With central bank meetings approaching, the bond market is concerned about the growth outlook. The EUR/USD exchange rate plunged to 1.16 yesterday after the IFO index fell to its lowest level in 6 months, which should reinforce the ECB’s caution.

Energyscan economics news

Household confidence and housing prices in the US will be the main economic reports of the day. They could reinforce the decline in long-term bond yields if they confirm the negative impact of inflationary pressures on growth.

Share this news :
Share on twitter
Share on linkedin
Share on email

You might also read :

January 31, 2022

Growing risk premium at the TTF beyond WIN22

European gas curve prices showed significant gains on maturities beyond WIN22 on Friday, still supported by political statements from the US over a blocking of…
May 26, 2021

Cushing-centric demand

ICE Brent crude oil remained at 68.9 $/b, as the API survey showed a continued drop in US crude stocks while refined product stocks dipped…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?  Sign up here!