There is a great deal of focus on economic data, geopolitics and AI in markets at the moment but I think the most-important signal is in Congress.
House Republicans can only afford to lose two votes to pass anything given the slim majority and they’re trying to move forward with a budget resolution that balloon’s the deficit to pay for Trump’s tax cut promises.
The possibility of that passing without reform is dwindling.
Laura Weiss from Punchbowl writes that Rep. Warren Davidson just said he won’t vote for it.
“I’m not voting for that,” he told reporters.
Yesterday, Rep. Thomas Massie said. “If the Republican budget passes, the deficit gets worse, not better.”
Other reports show Spartz and Burchett as ‘no’ votes.
The negotiations are always toughest at the end though. But given this, it makes sense that Treasury yields are falling and stocks are down. It means less of a chance of a corporate tax cut while a better likelihood of a lower deficit.