Trump praises non-farm data, urges Fed to lower rates; stocks rise, Cisco falls.

U.S. Congressional Budget Office: Trump's Fiscal Path Unsustainable, Deficit Forecast Increased by $1.4 Trillion

The U.S. Congressional Budget Office (CBO) has issued a warning that the country is on an unsustainable fiscal path, raising its deficit forecast for the next decade by $1.4 trillion. This adjustment is partly attributed to President Trump's tax law and immigration policies set for 2025. From 2026 to 2036, annual deficits are expected to reach or exceed 5.6% of GDP, marking a record high.

House Rejects Tariff Bill Against Canada

In a surprising turn, six Republican members of the House voted against a bill aimed at terminating Trump's tariffs on Canada. This reflects growing anxiety about the White House's economic agenda as midterm elections approach. Although Trump has threatened to veto similar measures, the dissent among Republicans indicates a weakening grip on the House majority.

Trump Praises Job Data, Calls for Lower Interest Rates

President Trump celebrated strong job data, suggesting that the U.S. should enjoy the lowest interest rates globally, which could save at least $1 trillion in interest payments annually. He claims this would balance the budget and lead to significant surpluses.

Surge in Tariff Revenue

The U.S. government reported a significant increase in tariff revenue, with January's customs duties reaching $30 billion, totaling $124 billion for the fiscal year to date, a 304% increase compared to the same period in 2025. This surge has helped slow the growth of the budget deficit.

CME Group Plans to Launch First Rare Earth Futures Contract

The CME Group is advancing plans to introduce the world's first rare earth futures contract, combining the two most critical rare earth elements, neodymium and praseodymium, essential for manufacturing permanent magnets used in various technologies.

Trump Orders Military to Source Coal Power

Trump has directed the Pentagon to procure electricity from coal plants, emphasizing coal as a reliable energy source. This move aims to extend the U.S.'s reliance on coal power and ensure stable electricity supply for critical industries.

Major Market Movements

Stock Market Overview

The Dow Jones and Nasdaq saw slight declines, while the S&P 500 closed flat. Notable movements included Micron Technology rising nearly 10%, while major tech stocks like Microsoft and Google fell over 2%.

Cisco's Earnings Report

Cisco reported record revenue growth but saw its stock drop over 7% due to concerns over future gross margins. The company expects a decline in gross margins for the upcoming quarter.

Meta's Data Center Investment

Meta Platforms announced a $10 billion investment in a new data center in Indiana, which is expected to create 300 long-term jobs and support local infrastructure improvements.

Conclusion

The U.S. economy faces significant challenges, with rising deficits and political tensions impacting fiscal policies. As companies like Meta and Cisco navigate their growth strategies, the market remains sensitive to economic data and policy changes.