US Spending Bill Passes, Adding $3.3 Trillion to Debt as Bond Market Reacts

House Passes Sweeping Spending Bill

• 🏛️ The House of Representatives has passed a sweeping domestic policy bill proposed by Republicans.
• ✂️ Key provisions include extending tax cuts from President Trump's first term and eliminating federal taxes on tips and overtime.
• 📉 To offset costs, the bill scraps some clean energy tax credits and cuts $800 billion from Medicaid, which is projected to leave about 10 million Americans uninsured.

Impact on US Federal Debt

• 📊 An independent analysis estimates the bill will add $3.3 trillion to America's federal debt.
• 📈 The US federal debt is now projected to reach 125% of GDP within 10 years.

Bond Market Concerns

• 📈 The yield on the US 30-year Treasury recently hit its highest point since October 2023, remaining over 5%.
• ⚠️ Investors are demanding a higher rate of return to hold the soaring US debt.
• 📉 A recent auction of $16 billion in 20-year treasuries experienced weak demand.
• 🌍 Asset managers note that money is increasingly moving out of US assets and into Europe due to trade instability affecting confidence in the US.

OpenAI's New AI Hardware Venture

• 💡 OpenAI is reportedly paying $6.5 billion for the new startup IO products, founded by former Apple designer Johnny Ive.
• 📱 Ive will join OpenAI to develop new artificial intelligence hardware, with a prototype described as the "coolest device the world has ever seen."

Ralph Lauren's Financial Outlook

• 📈 Ralph Lauren is expected to report higher revenue, but attention will be on comments regarding the impact of tariffs.
• ⏳ Tariffs on most countries have been paused for 90 days, with a potential return in early July, impacting brands like Ralph Lauren that use Cambodia for manufacturing.