Treasury
The Peter G. Peterson Foundation released an analysis Monday stating that under current law, the surge in federal debt over the next decade will raise borrowing costs, reduce private investment by 13.6%, and shrink the economy by $340 billion. The projection does not account for proposed spending increases and tax cut extensions by the Trump administration and Republican lawmakers; if these policies are implemented, deficits and debt would be significantly higher than current forecasts.
A University of Michigan survey shows that U.S. consumers' one-year inflation expectations surged to 7.3% this month, a multi-decade high, mainly due to concerns that the Trump administration's tariff policies will push up prices. Consumer confidence has fallen nearly 30% since January, and Republicans' confidence index also dropped 7% in May. Although hard data show moderate inflation and a solid job market, trade policy uncertainty continues to dominate consumer expectations.
FASB issued a final Accounting Standards Update on Thursday, clarifying the timing of revenue recognition related to warrants or equity instruments granted to customers. The new guidance aims to reduce diversity in practice and enhance the decision-usefulness of financial reporting, applicable to annual reporting periods after December 15, 2026.
The U.S. House Ways and Means Committee passed a tax bill on Wednesday evening (May 14) by a vote of 26 to 19, which is part of Trump's legislative agenda. The bill includes controversial individual tax provisions such as eliminating taxes on overtime pay and tips, as well as provisions to extend or restore several corporate tax breaks from Trump's first term, including those known as the 'Big Three': 100% corporate bonus depreciation, immediate expensing of corporate research and development costs, and a more favorable method for calculating interest expense deductions. The bill also maintains the current rates for three international tax provisions: GILTI, FDII, and BEAT. Analysts note that the bill still has a long way to go before it becomes law.
The US Consumer Price Index rose 0.2% month-on-month and 2.3% year-on-year in April, both below market expectations, marking the slowest annual pace since February 2021. Although the Trump administration implemented the highest tariffs in decades in April, the data has not yet reflected the full impact. Economists caution that tariff-driven price increases could still push up future inflation.
A survey released by financial software company Kyriba shows that corporate finance leaders have both expectations and concerns about AI: 76% believe AI brings security and privacy risks, but 96% of CFOs still prioritize advancing AI integration, and 53% expect AI to significantly change their roles.
The US House Ways and Means Committee will vote on Tuesday on a budget bill aimed at extending tax cuts from the Trump administration to prevent them from expiring at the end of 2025. The bill proposes cutting taxes by over $4 trillion and spending by $1.5 trillion, and eliminating overtime pay and tip taxes through 2028. The bill does not include Trump's proposal to raise taxes on the wealthiest to 39.6%, instead keeping the top rate permanently at 37%.
Amid uncertainty triggered by the Trump administration's April 2 tariff measures, Prologis Chief Financial Officer Tim Arndt outlined the company's financial strategy built on lessons from the 2008 financial crisis: holding three credit facilities, each with about 30 banks, providing access to $6 billion at any time; while leveraging its A/A2 ratings to secure long-term financing capabilities of 15 to 40 years. He expects no large-scale reshoring of manufacturing to the United States, but warehouse utilization remains steady at around 85%.
The United States and China reached an agreement over the weekend to lower the tariff rates recently imposed on each other and suspend some additional tariffs for 90 days.
Data released by the U.S. Department of Labor on May 8 showed that initial jobless claims for the week ending May 3 fell to 228,000, down from 241,000 the previous week; continuing claims also dropped to 1.88 million. Despite the Trump administration imposing a 10% baseline tariff on most trading partners and a 145% tariff on Chinese goods since April 2, and warnings of economic risks from Federal Reserve Chair Powell and multiple institutions, employment data still showed market resilience. Powell stated that the labor market is near full employment, with the April unemployment rate at 4.2%, and emphasized that policy will be assessed based on overall labor data. A New York Fed survey showed that household expectations for the job market deteriorated in April, with the average probability of a rising unemployment rate hitting a new high since April 2020.