Moody’s downgrade of U.S. debt sets stage for Monday unease
U.S. Credit Rating Downgrade: Moody's has downgraded the U.S. credit rating from Aaa to Aa1 due to growing budget deficits and lack of fiscal restraint, raising concerns among investors about rising borrowing costs and potential shifts in global demand for U.S. debt.
Market Reactions and Economic Outlook: Following the downgrade, Treasury yields increased and market sentiment turned cautious, although some analysts believe the impact may be temporary, citing past downgrades that had limited long-term effects on congressional behavior or asset sales.
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FED'S GOOLSBEE: INTEREST RATES COULD DECREASE, BUT INFLATION PROGRESS IS ESSENTIAL
- Federal Reserve's Goals: The Federal Reserve aims to manage interest rates effectively to combat inflation.
- Current Economic Outlook: While rates can still decrease, there is a need for visible progress in reducing inflation.
Could a Partial Government Shutdown Occur This Weekend?
Senate Vote Outcome: The U.S. Senate failed to advance a funding bill for the Department of Homeland Security, with a vote of 52 to 47, falling short of the 60 votes needed for passage.
Impact of Funding Delay: The lack of funding is expected to lead to a partial shutdown of the DHS, affecting essential workers, particularly those in the Transportation Security Administration at airports.
Democratic Opposition: Democrats blocked the bill due to disagreements over immigration enforcement measures, insisting on significant changes before agreeing to any funding.
Market Reactions: Following the vote, U.S. equities declined, with various ETFs tracking major indices showing losses, indicating a bearish sentiment in the market.
Americans Suffer the Most from Trump's Tariffs, According to NY Fed Report
Tariff Increase: The average tariff rate on U.S. imports rose significantly from 2.6% to 13% in 2025, primarily due to tariffs imposed during Trump's first term, which were not offset by price cuts from foreign exporters.
Economic Burden: U.S. businesses and consumers bore the majority of the economic burden from these tariffs, with nearly 90% of the tariff costs being shouldered by Americans, leading to increased import prices.
Impact on Supply Chains: The higher costs prompted companies to adjust and reorganize their supply chains, as they faced rising expenses due to the tariffs.
Market Status: Concurrently, U.S. equities experienced declines, with major ETFs tracking the S&P 500 and other indices showing significant drops, indicating a bearish sentiment in the market.
Peter Schiff Disagrees with Trump's Claim That Tariffs Fueled US Wealth in the 1880s and 1890s – Offers Advice on Achieving Wealth Again
Economic Strategy Proposal: The Economist outlines a roadmap to restore U.S. wealth akin to the 1880s by proposing the elimination of 90% of federal government agencies, except for essential programs like Social Security and Medicare.
Critique of Government Spending: Peter Schiff argues that the U.S. was wealthier in the late 19th century due to minimal government spending, which was only about 2% of GDP, compared to over 23% today.
Call for Federal Law Repeal: Schiff advocates for the repeal of nearly all federal laws enacted since 1900 to facilitate a return to a tariff-based economy, similar to the prosperous era of the 1880s and 1890s.
Concerns Over Global Economic Impact: Schiff highlights President Trump's comments on other countries benefiting at the expense of the U.S. economy, suggesting that if these practices continue, it could lead to increased prices and interest rates for American consumers.
Bessent Supports Potential Senate Investigation of Powell Over DOJ as Republicans Aim to Overcome Senator Tillis' Resistance: Report
GOP Lawmakers' Compromise: GOP lawmakers view a proposal to investigate Federal Reserve Chair Jerome Powell as a compromise and an attempt to placate Senator Thom Tillis, who has expressed opposition to President Trump's nominee for the position.
Tillis' Stance on Investigation: Senator Tillis has stated he will oppose any Federal Reserve nominee until the Department of Justice's inquiry into Powell is resolved, emphasizing the importance of protecting the Fed's independence from political interference.
Federal Reserve Renovation Probe: The investigation into Powell is centered around a $2.5 billion renovation project for the Federal Reserve's Eccles Building, which has raised concerns about potential misconduct.
Market Reactions: In the context of the ongoing investigation, U.S. equities showed gains, with various ETFs tracking the S&P 500 and Treasury bonds experiencing slight increases, indicating a mixed sentiment in the market.
Could the US Government Close on Valentine's Day? Insights from Prediction Markets
Democrats' Stance on ICE Reform: Senate Democrats, led by Chuck Schumer and Hakeem Jeffries, refuse to support another stopgap funding measure for the Department of Homeland Security without an agreement on ICE reforms, citing the agency's negative impact on communities.
Recent Violence Linked to ICE: The letter from Schumer and Jeffries highlights the tragic deaths of two U.S. citizens in Minneapolis due to actions by federal immigration agents, emphasizing the need for reform to prevent further chaos in communities.
Potential Government Shutdown: The U.S. government is facing a potential partial shutdown, coinciding with Valentine's Day, as negotiations over funding and immigration reform remain unresolved.
Call for Bipartisan Agreement: Schumer expresses optimism about reaching a bipartisan agreement on ICE reforms before the deadline, urging Republican leaders to collaborate on legislative solutions.
FED'S GOOLSBEE: INTEREST RATES COULD DECREASE, BUT INFLATION PROGRESS IS ESSENTIAL
- Federal Reserve's Goals: The Federal Reserve aims to manage interest rates effectively to combat inflation.
- Current Economic Outlook: While rates can still decrease, there is a need for visible progress in reducing inflation.
Could a Partial Government Shutdown Occur This Weekend?
Senate Vote Outcome: The U.S. Senate failed to advance a funding bill for the Department of Homeland Security, with a vote of 52 to 47, falling short of the 60 votes needed for passage.
Impact of Funding Delay: The lack of funding is expected to lead to a partial shutdown of the DHS, affecting essential workers, particularly those in the Transportation Security Administration at airports.
Democratic Opposition: Democrats blocked the bill due to disagreements over immigration enforcement measures, insisting on significant changes before agreeing to any funding.
Market Reactions: Following the vote, U.S. equities declined, with various ETFs tracking major indices showing losses, indicating a bearish sentiment in the market.
Americans Suffer the Most from Trump's Tariffs, According to NY Fed Report
Tariff Increase: The average tariff rate on U.S. imports rose significantly from 2.6% to 13% in 2025, primarily due to tariffs imposed during Trump's first term, which were not offset by price cuts from foreign exporters.
Economic Burden: U.S. businesses and consumers bore the majority of the economic burden from these tariffs, with nearly 90% of the tariff costs being shouldered by Americans, leading to increased import prices.
Impact on Supply Chains: The higher costs prompted companies to adjust and reorganize their supply chains, as they faced rising expenses due to the tariffs.
Market Status: Concurrently, U.S. equities experienced declines, with major ETFs tracking the S&P 500 and other indices showing significant drops, indicating a bearish sentiment in the market.
Peter Schiff Disagrees with Trump's Claim That Tariffs Fueled US Wealth in the 1880s and 1890s – Offers Advice on Achieving Wealth Again
Economic Strategy Proposal: The Economist outlines a roadmap to restore U.S. wealth akin to the 1880s by proposing the elimination of 90% of federal government agencies, except for essential programs like Social Security and Medicare.
Critique of Government Spending: Peter Schiff argues that the U.S. was wealthier in the late 19th century due to minimal government spending, which was only about 2% of GDP, compared to over 23% today.
Call for Federal Law Repeal: Schiff advocates for the repeal of nearly all federal laws enacted since 1900 to facilitate a return to a tariff-based economy, similar to the prosperous era of the 1880s and 1890s.
Concerns Over Global Economic Impact: Schiff highlights President Trump's comments on other countries benefiting at the expense of the U.S. economy, suggesting that if these practices continue, it could lead to increased prices and interest rates for American consumers.
Bessent Supports Potential Senate Investigation of Powell Over DOJ as Republicans Aim to Overcome Senator Tillis' Resistance: Report
GOP Lawmakers' Compromise: GOP lawmakers view a proposal to investigate Federal Reserve Chair Jerome Powell as a compromise and an attempt to placate Senator Thom Tillis, who has expressed opposition to President Trump's nominee for the position.
Tillis' Stance on Investigation: Senator Tillis has stated he will oppose any Federal Reserve nominee until the Department of Justice's inquiry into Powell is resolved, emphasizing the importance of protecting the Fed's independence from political interference.
Federal Reserve Renovation Probe: The investigation into Powell is centered around a $2.5 billion renovation project for the Federal Reserve's Eccles Building, which has raised concerns about potential misconduct.
Market Reactions: In the context of the ongoing investigation, U.S. equities showed gains, with various ETFs tracking the S&P 500 and Treasury bonds experiencing slight increases, indicating a mixed sentiment in the market.
Could the US Government Close on Valentine's Day? Insights from Prediction Markets
Democrats' Stance on ICE Reform: Senate Democrats, led by Chuck Schumer and Hakeem Jeffries, refuse to support another stopgap funding measure for the Department of Homeland Security without an agreement on ICE reforms, citing the agency's negative impact on communities.
Recent Violence Linked to ICE: The letter from Schumer and Jeffries highlights the tragic deaths of two U.S. citizens in Minneapolis due to actions by federal immigration agents, emphasizing the need for reform to prevent further chaos in communities.
Potential Government Shutdown: The U.S. government is facing a potential partial shutdown, coinciding with Valentine's Day, as negotiations over funding and immigration reform remain unresolved.
Call for Bipartisan Agreement: Schumer expresses optimism about reaching a bipartisan agreement on ICE reforms before the deadline, urging Republican leaders to collaborate on legislative solutions.
