3 Stocks That Could Soar in a Soft-Dollar Environment

There is no prospect of a major challenge to the dollar's status as the world's reserve currency of choice any time soon, central bankers gathered for an annual conference in the Portuguese resort of Sintra said on Tuesday.

U.S. President Donald Trump's unpredictable economic, trade and security policies have spurred questions over whether the U.S. currency, which accounts for 58% of the world's reserves, can remain at the centre of the global monetary system.

European Central Bank President Christine Lagarde, who has argued the euro could over time become an alternative to the dollar if Europe's currency zone enacted necessary reforms, said 2025 could in future be viewed as "pivotal" in this respect.

"(But) for a major change to occur it will take a lot of time and a lot of effort," she told a panel with her U.S., British, Japanese and Korean counterparts.

She noted that "investors are looking at options" in a climate characterised by uncertainty and unpredictability and that there was evidence that the euro was benefiting from that.

"It's not going to happen just like that overnight. It never did historically," she said. "But there is clearly something that has been broken. Whether it is fixable, or whether it is going to continue to be broken - I think the jury's out."

Bank of Japan Governor Kazuo Ueda also noted that any significant change would depend on structural reforms.

"It's to a certain extent up to what areas like Europe or China will do in terms of improving the efficiency or convenience of their currencies," he said, citing as an example the efforts at capital market integration in the euro zone.

Bank of England Governor Andrew Bailey said any change to the dollar's status was a long way off.

"I don't see ... a sort of a major shift at the moment," he said, arguing that any reserve currency had to offer a supply of safe assets into the market that can be used for purposes of collateral and security.

Bank of Korea Governor Rhee Chang-yong said the prospect of a long-term shift of the dollar sentiment was a subject of discussion for some even as they retained their dollar holdings.

"It looks like people are talking about it. But at this moment they keep the dollar share while increasing their hedging ratio," he told the panel.

Lagarde told a recent audience in Berlin that there was an opening for a "global euro moment", if it earned it.

Source: Yahoo Finance

Powell’s future at the Fed

Source: cnbc

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The Republican-controlled U.S. Senate passed President Donald Trump's tax and spending bill on Tuesday, signing off on a massive package that would enshrine many of his top priorities into law while adding $3.3 trillion to the national debt.

The bill now heads back to the House of Representatives for final approval. Trump has pushed lawmakers to get it to his desk to sign into law by the July 4 Independence Day holiday.

Trump's Republicans have had to navigate a narrow path while shepherding the 940-page bill through a Congress that they control by the slimmest of margins. With Democrats lined up in opposition, Republicans have had only three votes to spare in both the House and Senate as they wrangled over specific tax breaks and healthcare policies that could reshape entire industries and leave millions of people uninsured.

Yet they have managed to stay largely unified so far. Only three of the Senate's 53 Republicans joined with Democrats to vote against the package, which passed 51-50 after Vice President JD Vance cast the tiebreaking vote.

The vote in the House, where Republicans hold a 220-212 majority, is likely to be close as well.

'NOT FISCAL RESPONSIBILITY'

An initial version passed with only two votes to spare in May, and several Republicans in that chamber have said they do not support the version that has emerged from the Senate, which the nonpartisan Congressional Budget Office estimates will add $800 billion more to the national debt than the House version.

The House Freedom Caucus, a group of hardline conservatives who repeatedly threatened to withhold their support for the tax bill, is pushing for more spending cuts than what the Senate offered.

“The Senate’s version adds $651 billion to the deficit — and that’s before interest costs, which nearly double the total,” the caucus posted online on Monday, “That’s not fiscal responsibility. It’s not what we agreed to.”

A group of more moderate House Republicans, especially those who represent lower-income areas, object to the steeper Medicaid cuts in the Senate’s plan.

“I will not support a final bill that eliminates vital funding streams our hospitals rely on,” Representative David Valadao, a California Republican, said during the weekend debate.

Still, House Republicans are likely to face enormous pressure to fall in line from Trump in the days to come.

TAX BREAKS, IMMIGRATION CRACKDOWN, TIGHTER BENEFITS

The "One Big Beautiful Bill Act" would make permanent Trump's 2017 business and personal income tax cuts, which are due to expire at the end of this year, and dole out new tax breaks for tipped income, overtime and seniors that he promised during the 2024 election. It provides tens of billions of dollars for Trump's immigration crackdown and would repeal many of Democratic President Joe Biden's green-energy incentives.

The bill would also tighten eligibility for food and health safety net programs, which nonpartisan analysts say would effectively reduce income for poorer Americans who would have to pay for more of those costs.

The CBO estimates the latest version of the bill would add $3.3 trillion to the $36.2 trillion debt pile. That increased debt effectively serves as a wealth transfer from younger to older Americans, nonpartisan analysts say, as it will slow economic growth, raise borrowing costs and crowd out other government spending in the decades to come.

The bill also would raise the nation's borrowing limit by $5 trillion, postponing the prospect of a debt default this summer that would roil global markets.

Republicans rejected the cost estimate generated by the CBO's longstanding methodology. Nonetheless, foreign bond investors see incentives to diversify out of U.S. Treasuries as deficits deepen.

Republicans say the bill will help families and small businesses and put benefit programs like Medicaid on a more sustainable path, and they have broadly agreed on its main contours. But they have struggled to agree on the Medicaid funding mechanism and a tax break for state and local tax payments that is a top priority for a handful of House Republicans from high-tax states including New York, New Jersey and California. Others worry that a crackdown on a funding mechanism for the Medicaid health program could lead to service cutbacks in rural areas.

Some on the party's right flank, meanwhile, have pushed for deeper Medicare cuts to lessen its budgetary impact.

Trump has singled out those Republican dissenters on his Truth Social network and excluded them from White House events, and few have been willing to defy him since he returned to office in January. Senator Thom Tillis of North Carolina, one of the three Republicans who voted against the bill, said on Sunday he would not run for re-election next year.

Source: Reuters

Source: cnbc

Source: Reuters