Aurelia Butler

Switzerland has historically had balanced budgets although began reporting larger deficits from 2020 due to extra costs tied to the COVID-19 pandemic. In 2024, the projected deficit was 2.6 billion Swiss Francs, a government website showed.”In total, there is around 2 billion Francs that were not budgeted for in the 2026 budget,” said Keller-Sutter in an interview published in SonntagsZeitung and Tages-Anzeiger on Sunday.”We do have additional income from profit taxes, but they can’t compensate for everything,” she said, referring to high profits reported in 2022 and 2023 by Geneva-based commodity trading houses.Swiss voters decided in a referendum last year to increase pension payments for older people despite government warnings that it is financially unsound.The neutral country is also upgrading its defences after the Ukraine war, buying new fighter aircraft and missile systems as well as building new data centres to make it less vulnerable to cyber attacks.Keller-Sutter, who took on the rotating one-year presidency earlier this month, said in the same interview that the government was working on consultation procedure documents for new banking regulations after the release last month of an inquiry into the collapse of Credit Suisse.She said such regulations might include new powers for regulators to wield fines for banks as well as individuals plus possible claw-backs for banker bonuses.Asked whether new measures would prevent future government bail-outs, she indicated there was no guarantee. “We in Switzerland…have to do our homework (on banking regulation). But one shouldn’t claim 100% security,” she said.($1 = 0.9057 Swiss francs) More

“Markets avoided what would’ve been a worst-case scenario for risk assets on Donald Trump’s inauguration. The President indeed held back from enacting a national economic emergency and countrywide tariffs on China and the rest of the world,” ING said in a recent report.Trump’s restraint in the early days of his presidency has opened up room for negotiations and avoided an immediate escalation of friction with China, ING added.The bank highlighted several areas where cooperation between the U.S. and China could be possible, including addressing the fentanyl crisis and resolving the TikTok issue. On fentanyl, ING said this “is an area where there should be room for cooperation,” noting that chemical exports to Mexico and Canada accounted for just $2.8 billion in 2024, or less than 0.1% of China’s total exports.The ongoing TikTok saga, meanwhile, could set the tone for U.S.-China ties, with the 75-day moratorium on TikTok’s ban setting up early April as a “potentially important time window to watch if negotiations do not proceed smoothly.”ING cautioned, however, that while China appears ready to ramp up imports and open up market access, the path to avoid a more destructive trade war remains narrow.”While China clearly would prefer to avoid trade conflicts, especially given recent economic sentiment, this decreased reliance on the US market and US suppliers does open up the possibility for more aggressive retaliation (such as export controls or more targeted tariffs on large US multinationals) from China if it is pushed into a corner,” ING added. More

WASHINGTON (Reuters) – Republicans who control the U.S. House of Representatives are trying to overcome internal differences on how to pay for President Donald Trump’s sweeping tax cuts, with hardline conservatives determined to reduce an annual federal deficit approaching $2 trillion.With a narrow 218-215 House majority, they need near-total unity as they prepare to vote within weeks on a fiscal 2025 budget resolution that will be a critical step toward passing Trump’s sprawling agenda of tax cuts, border and immigration reform, energy deregulation and increased military spending.Ahead of a three-day policy retreat that kicks off in Miami on Monday, some worried openly that House Speaker Mike Johnson’s leadership team might balk at the spending cuts needed to offset the cost of Trump’s $6 trillion tax-cut agenda while also addressing the nation’s more than $36 trillion in debt.Republicans have vowed to extend Trump’s tax cuts from the 2017 Tax Cuts and Jobs Act, or TCJA, which are set to expire at the end of this year. The nonpartisan Committee for a Responsible Federal Budget estimates that doing so would cost more than $4 trillion over ten years, while Trump campaign pledges to eliminate taxes on tips, overtime and Social Security benefits could cost another $1.8 trillion.Failure to reach agreement could trip up Republican lawmakers’ plan to pass Trump’s agenda by the end of May, using a maneuver to bypass Senate Democrats that will require almost all of the fractious majority to agree.”Most of us support the TCJA. I don’t think that’s the issue. We all want to support what President Trump is doing. But we also recognize the need to get our fiscal house in order,” said Representative Michael Cloud, a member of the hardline House Freedom Caucus.”We’ve got to have a course correction, and it’s got to be dramatic,” he told Reuters.Johnson said he hopes to finalize components of a single sprawling legislative package to fund Trump priorities. Republicans must also decide whether to include an increase in the federal government’s debt ceiling — which Congress must do later this year to avoid a devastating default — and disaster relief for Los Angeles communities devastated by wildfires.     “There are a number of ideas on the table,” Johnson told reporters before lawmakers left Washington last week, saying his caucus aimed to reach agreement in Miami.House Democratic leader Hakeem Jeffries blasted Republican plans as “a contract against America.” He warned: “It will hurt working families, hurt the middle class, hurt our children, hurt our seniors and hurt our veterans.” Jeffries also said the Republican agenda would undermine the Medicaid healthcare program for the poor, as well as government-subsidized healthcare for uninsured workers under the Affordable Care Act.COST OF TRUMP AGENDARepublicans say they face a major challenge finding enough spending cuts to cover the cost of the Trump agenda and worry privately that hardliners’ insistence on significant deficit reduction could harm their constituents by reducing Medicaid funding for hospitals and outlays for other community services.”This thing cannot be deficit neutral,” said Republican Representative Ralph Norman, adding that the package would need to reduce the deficit “to the tune of a big number.”Another potential roadblock: The rising U.S. deficit is weighing on the bond market, pushing the nation’s borrowing costs higher. A significant deepening of the deficit could add to those worries.’THIS IS AN EQUAL BODY’The debate will test which is more powerful — Trump’s demands or hardliners’ will to hold to a traditional Republican goal of cutting the deficit.”The president said very clearly what he wants. Now the question is, what do we want? This is an equal body … We’re supposed to have different opinions. If we don’t, we’re in trouble, because we’re no longer a constitutional republic, said Representative Richard McCormick (NYSE:MKC).The House Budget Committee has circulated a 50-page menu of proposals that includes trillions of dollars ranging from ideas widely supported in the party, such as repealing green energy tax credits, to the controversial, including the federal home mortgage interest deduction.A proposal to raise $1.9 trillion from a 10% tariff on imported goods, which Trump has proposed, also faces opposition from House and Senate conservatives. “I’m not in favor of raising taxes. Tariffs are simply a tax,” said Republican Senator Rand Paul, a leading fiscal hawk.Even as Republicans try to edge toward agreement, Representative Tim Burchett said he worries that up to $200 billion in proposed additional funding for the Pentagon could absorb savings that he would rather use to address the deficit. But he stopped short of saying that such an outcome would lead him to oppose the package.   “If I see us trending in the right direction, that might be enough,” Burchett said. “But again, we’re lying to ourselves, and we’re lying to the public. We go home and say, we’re going to do these things. And then we come up here and wink and nod and sell the people down the river. And we go home and get reelected. It’s a crazy system.” More

What followed was a boom in economic growth, a surge in inflation, and a jump in interest rates — all against an environment of renewed violence in several regions around the world and the emergence of artificial intelligence.This has all translated into 563 rate hikes, $7 trillion in quantitative tightening, a cumulative $11 trillion US deficit, $36 trillion in national debt, and $1.2 trillion in annual US interest payments over the opening half of the decade, analysts at Bank of America flagged in a note to clients.However, they argued that perhaps the biggest change for asset prices has come from an inflection in bond yields, which move inversely to prices. An uptick in benchmark 10-year US Treasury yields to their long-term average after a pandemic-era drop “has led to frequent booms and busts in asset prices, with the former more concentrated than the latter”, the analysts said.”Ultimately, macro has dominated over the past five years,” they said.But, as the back-half of the 2020s dawns, an “era of micro” may be about to begin, the analysts predicted.”We think micro themes will dominate macro in the coming 5 years: tech transforming our economy against a backdrop of populism, AI resource bottlenecks, generational shifts in power and wealth, and a return of government fiscal discipline,” they wrote.In particular, the change to a focus on micro trends will be driven by accelerating technological disruption fueled by the widespread adoption of AI in both businesses and societies, they said.Productivity growth will have to increase in turn in order to justify soaring tech sector equity valuations and prices, while AI itself will require “more of everything — from resources to infrastructure”, the analysts argued.”These huge funding requirements could not come at a less opportune time: record government debt and populist policies will prioritize breaking the inflation cycle in the US and reviving stagnant growth at the heart of Europe,” they wrote, adding that they foresee “backlashes” to the disruptive force of AI over the rest of the decade.Generation Z, also known as “Zoomers”, will subsequently “have a major say in the government response and the extent to which AI disrupts our societies and the labour market, as well as how government debt is managed,” they said. More