US Dollar Crisis: Dollar Falls Amid Fiscal Fears

Former President Joe Biden's administration aimed to lower Americans' monthly student debt payments and maximize loan forgiveness opportunities. President Donald Trump's administration seems more focused on ensuring all those loans are repaid.

A harsh reality could be on the way for borrowers who have gotten used to leeway in the federal student loan system, or are struggling to make payments: An estimated 1 in 12 Americans will face "negative" financial consequences in the coming months, finds a new report by the University of California Student Law Initiative, researched in conjunction with the left-leaning nonprofit Student Borrower Protection Center.

Some student loan borrowers are already experiencing credit score drops. Others will face involuntary debt collection this summer, the Department of Education announced. Many of the 43 million Americans with student debt are already struggling financially: Nearly 30% of borrowers report, at some point, having gone without food, medication or other necessities to make their student loan payment, a 2024 Consumer Financial Protection Bureau survey found.

In response to a request for comment, a U.S. Department of Education spokesperson pointed CNBC Make It to a statement made by Secretary of Education Linda McMahon on April 21.

"The Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation's economic outlook," McMahon said.

The University of California report says that three particular groups, totaling 20 million student loan borrowers, risk deepening their financial challenges this summer:

Borrowers behind on monthly payments

Over 7 million borrowers were behind on their monthly payments as of March 31, according to Department of Education data. Most of them — nearly 6 million — were between 91 and 180 days past due on their payments, the data says. The rest were at least 31 days behind.

Once a loan is 90 days past due, the loan servicer reports the delinquency to the credit reporting bureaus, which can lower the borrower's credit score and leave a negative mark on their credit report. Trump's first presidential administration paused delinquency reporting to credit bureaus, along with monthly payments, in March 2020 when the Covid-19 pandemic hit.

Monthly payments resumed in October 2023 under the Biden administration, and delinquency reporting resumed in January 2025 under Trump. The move may have happened regardless of the 2024 presidential election's results: In October, the Biden administration announced plans to resume delinquency reporting in January.

Nine million borrowers could see their credit scores drop from delinquency reporting, according to analysis from Federal Reserve Bank of New York economists. Since January, some borrowers on social media have reported seeing declines of more than 100 points, which could make it more difficult for them to get approved for new loans or credit cards, get a lease on a home or activate utilities services.

If you're delinquent on your loan, paying your past-due amount or getting on a payment plan can bring your account into good standing.

Borrowers who are in default

Loans that go 270 days past due without a payment are considered in default. More than 5 million borrowers have at least one federal loan in this situation, according to the researchers' analysis of Federal Student Aid data.

Before the pandemic, those borrowers would've seen their tax refunds and federal benefits, including portions of their Social Security checks, seized by the federal government in a process known as "Treasury offset." Additionally, their wages would've been be subject to garnishment, meaning the government would take money — up to 15% of disposable income — out of their paychecks to repay the defaulted loans.

Trump's first administration paused Treasury offset and wage garnishment during the pandemic. The Biden administration maintained those pauses, planning to restart Treasury offset in July 2025 and wage garnishment in October 2025 — with an emphasis on trying to decrease the number of impacted borrowers — according to a January 13 Department of Education memo.

The Trump administration instead restarted Treasury offsets in early May, notifying borrowers whose federal benefits may be impacted. People facing wage garnishment will be contacted later this summer, the Department said in an April 21 press release. The federal government is required to provide borrowers with a 60-day notice before reducing their benefits or wages.

If you fall into either category, your benefits or wages will return to normal once your debt is repaid, you enter a rehabilitation agreement that includes a payment plan or you request a hearing to determine whether you're exempt from some or all wage garnishment.

Borrowers enrolled in the SAVE plan

At least 8 million borrowers are currently in an administrative forbearance because they enrolled in the Saving on a Valuable Education (SAVE) plan, an income-driven repayment plan created under the Biden Administration. That plan is temporarily blocked by federal courts after multiple Republican-led states sued to prohibit its enactment.

These borrowers may not be required to make payments for now. But when they are, their payments will likely be higher than they'd have been on the SAVE plan. Under currently available income-driven repayment plans, borrowers' monthly payments can be up to 20% of their discretionary income, compared with a 5% cap under the SAVE plan.

The SAVE plan's legal challenges began during the Biden administration, which sought to defend it in court — something the Trump administration is unlikely to do.

In Trump's "big, beautiful" tax bill, which narrowly passed the U.S. House of Representatives on Thursday, Republicans proposed creating a new income-driven repayment plan and eliminating the existing repayment options for loans disbursed on or after July 1, 2026.

The proposal — which includes a new repayment path called the Repayment Assistance Plan — would set minimum monthly payments at $10 for low-income borrowers, as opposed to no monthly payments under the SAVE plan. It's unclear whether the Repayment Assistance Plan will be included in the version of the bill that gets voted on in the Senate.

Source: CNBC

Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis.

Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money.Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% (.MIWD00000PU), from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions.

The turbulence continued on Friday with a sudden selloff in stocks after Trump said he was recommending a straight 50% tariff on goods from the European Union. A day earlier, government debt saw a sudden slump, spooking long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts.

"There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi.He said he was following short-term speculative market trends instead of taking a stance on the global outlook.

"You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term."

Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably.

"There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said.

CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed.

UNPREDICTABLE

This week, yields on 30-year U.S. Treasuries , rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for.

Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days.

John Roe, head of multi-asset funds at Britain's biggest investor L&G, said 2020's pandemic-induced market was "the last time things were so totally unpredictable."

He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month.Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said.

Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs.

"We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said.

Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year.

Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook.WHIPSAWED

HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets.

"This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said.

Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation.

Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed.

Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high.

"The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn.

The Bank for International Settlements warned, opens new tab in March that macro-economic U.S. surprises were "inducing larger market responses abroad."

But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued.

"We need to acknowledge that what we know about investing does not apply at the moment," he said.

Source: Kitco

The plan, which aims to have clean sources produce at least 95% of GB’s power by 2030, up from 60% in 2023, is expected to significantly increase the country’s renewable energy capacity.

The current capacity of 46GW of wind and solar is expected to rise to 117-126GW, with offshore wind capacity alone increasing from 14GW to 43-50GW.

According to Bernstein, the impact of higher investments in grids and renewables under various scenarios has been quantified. In their base-case model, they anticipate wholesale charges to fall by 47% due to a normalisation of wholesale gas and power prices to pre-crisis levels.

Network (LON:NETW) charges are expected to rise by 27%, led by the investment in transmission networks. Transmission charges currently constitute around 5% of the customer bill, but are forecasted to make up about 10% of the overall bill by 2030.

The policy costs are projected to rise from 22% to 38% of the bill, driven by the expansion of renewables and a fall in wholesale power prices. Although renewable contracts for difference (CfD) charges are expected to increase from £31/year today to £194/year by 2030, only £71/year would be from new renewable capacity yet to be contracted.

The rest of the increase is from existing capacity and already contracted capacity.

Based on these assumptions, Bernstein finds that the overall bills will rise at about 1.5% p.a. by 2030, or £81/year. This analysis does not assume any increase in power demand at the system or typical customer bill level.

The bill structure in 2030 will be far more resilient to commodity price shocks than in 2022, due to the CfD scheme.

Bernstein also ran several sensitivities on their analysis. They found that if there is a 2% p.a. growth in demand, bills will remain at current levels due to higher fixed system cost absorption, which would make up about 60% of the bill by 2030.

In a lower renewable growth scenario, with 81GW renewable capacity and 35GW offshore, bill increases are limited to 0.7% p.a., or £35/year. If no new renewable capacity is contracted from now on, bills will remain flat.

Higher wholesale prices would result in higher bills; however, due to the CfD scheme, the overall impact on bills would be a 2.2% growth p.a., or £121/year. Assuming new offshore wind clears at 24% higher than AR6 (versus 10% in the base case), bill increases would be 1.7% p.a., or £91/year.

Bernstein’s analysis indicates that likely bill rises under the CPP 2030 will be at 1.5-2.2% p.a. and come with a number of strategic benefits to the U.K., including resilience to external commodity price shocks, lower gas imports, industrial policy benefits, and a very low carbon power system that can decarbonize other sectors such as transport and heating.

However, they believe that unless there is strong evidence of demand growth, the extremely ambitious renewable expansion targets should be moderated to limit price increases for consumers while still providing ample opportunities for renewables growth.

In terms of investment implications, Bernstein rates SSE PLC (LON:SSE) and National Grid PLC (LON:NG) as Outperform, while RWE AG (OTC:RWEOY) (ETR:RWEG) ST O.N. (BIT:RWE), Iberdrola (OTC:IBDRY) (BME:IBE), and Oersted AS (CSE:ORSTED) are rated as Market-Perform.

These ratings are based on the companies’ heavy investments into U.K. grids and renewables.

Source: Investing

All the economy is a stage this week. The “big, beautiful” tax bill passed the US House of Representatives in the wee hours of Thursday morning, and millions of college graduates got their diplomas and set off into the job market, competing with an ever-growing army of robot workers.

In the second episode of Everybody’s Business from Bloomberg Businessweek, hosts Stacey Vanek Smith and Max Chafkin dive into the Republican tax bill, the artificial intelligence job threat and the turning of (actual) lead into (actual) gold.

The tax cut extension still has to pass the Senate, but the House version would add roughly $4 trillion to the deficit over the next decade and would be, by far, the most expensive policy the Trump administration has enacted. In spite of this, the legislation hasn’t gotten nearly the attention of other policies, including the “Department of Government Efficiency” (its cuts, many of which are the subject of litigation, have not amounted to even 1% of the federal budget). But all the sound and fury signifying a rounding error is by design, according to author and economic journalist Kyla Scanlon. Scanlon, author of In this Economy? , says you can learn a lot about the Trump Administration’s economic policies by watching WrestleMania.

She argues that Trump’s dramatic, often erratic moves serve to create an emotional arc: Extreme fear of a 245% tariffs on Chinese goods, extreme relief when the tariffs drop to 30% and a perceived triumph that a “deal” has been made. Scanlon points out the president is no stranger to professional wrestling. He used to be a regular guest on WWE.

Then Bloomberg reporter Sarah Frier joins to talk about AI and jobs. Fears are growing in the US workforce that jobs are being lost to AI, and a new study estimates that up to one-third of positions in developed countries will be “transformed” by it. Frier looks at what jobs might be under threat and how real the worries are.

Source: Bloomberg Europe

U.S. equities have pulled back this week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the U.S. government's $36 trillion in debt. Long-dated U.S. Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5% and hitting its highest level since late 2023.Focus will shift to Wednesday's quarterly results from Nvidia, one of the world's largest companies by market value whose stock is a major influence on benchmark equity indexes.

"All eyes are going to be on Nvidia's report," said Chuck Carlson, CEO of Horizon Investment Services. "The whole AI theme has been a major driver of the market and Nvidia is at the epicenter of that theme."

Nvidia will be the last of the "Magnificent Seven" megacap tech and growth companies to report results for this period. Their stocks have been mixed in 2025 after leading the market higher as a group in the last two years.Nvidia shares are down 1% this year after soaring over 1,000% from late 2022 through the end of 2024 as its AI chip business spurred massive increases in revenue and profits.

Nvidia's first-quarter earnings likely jumped about 45% on revenue of $43.2 billion, analysts estimated in an LSEG poll.

After big tech companies earlier in the quarter signaled robust AI-related spending, Nvidia can deliver a strong message about AI and how companies' spending plans are faring, said Art Hogan, chief market strategist at B Riley Wealth."Nvidia can reinvigorate the enthusiasm for that theme."

Nvidia, popular among smaller retail shareholders, is an investor sentiment indicator, said Wasif Latif, chief investment officer at Sarmaya Partners.

"Given its sheer size and attention that it is commanding, there are going to be a lot of people looking for what happens with the stock," Latif said.

U.S.-China relations could also be in focus with Nvidia's report. The company said last month it would take $5.5 billion in charges after the U.S. government limited exports of its H20 artificial intelligence chip to China.

Trade developments have whipsawed the stock market this year, especially after U.S. President Donald Trump's April 2 announcement of sweeping tariffs on imports globally set off extreme asset price volatility.

Since then, Trump's easing of tariffs, especially a U.S.-China truce, has helped equities rebound. The benchmark S&P 500 index (.SPX), opens new tab ended on Thursday down less than 1% for 2025, and down about 5% from its February record high.

Investors shifted attention this week to the fallout from Trump's fiscal plans, especially after Moody's downgraded the U.S. sovereign credit rating due to concerns about the nation's growing debt pile.

The U.S. House of Representatives, controlled by Trump's Republican party, on Thursday narrowly passed a tax and spending bill that would enact much of his agenda while adding an estimated $3.8 trillion to the debt over the next decade. The bill is heading to the U.S. Senate for its review.

Long-dated government bond yields have been rising globally amid a selloff. In the U.S., benchmark 10-year Treasury yields this week hit their highest since February. Bond prices move opposite to yields.

Higher yields can diminish the appeal of stocks as they represent higher borrowing costs for companies and consumers, while making fixed income assets relatively more attractive.

"The biggest concern from an investment standpoint is that higher rates represent more competition for equities," said Horizon's Carlson. "If rates continue to move higher, that is going to put increasing amounts of pressure on where investors are putting their money."

Source: Kitco

Iranian and U.S. negotiators resumed talks on Friday in Rome to resolve a decades-long dispute over Iran's nuclear ambitions, Iranian media reported, despite Tehran warning that clinching a new deal might be insurmountable amid mutually exclusive demands.

The stakes are high for both sides. President Donald Trump wants to curtail Tehran's potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel. The Islamic Republic, for its part, wants to be rid of devastating sanctions on its oil-based economy.

Iranian Foreign Minister Abbas Araqchi and Trump's Middle East envoy Steve Witkoff were expected to lead a fifth round of talks, through Omani mediators.

Both Washington and Tehran have taken a tough stance in public over Iran's intensifying uranium enrichment programme, which could potentially give it scope to build a nuclear warhead, even though Tehran says it has no such ambitions and the purposes are purely civilian.

Iran insists the talks are indirect, but U.S. officials have said the discussions - including the latest round on May 11 in Oman - have been both "direct and indirect".

Ahead of the talks, Araqchi wrote on X: "...Zero nuclear weapons = we Do have a deal. Zero enrichment = we do NOT have a deal. Time to decide."

White House press secretary Karoline Leavitt told reporters on Thursday that Trump believes negotiations with Iran are "moving in the right direction".

Tehran and Washington have both said they prefer diplomacy to settle the impasse.

U.S. Secretary of State Marco Rubio said on Tuesday that Washington is working to reach an accord that would allow Iran to have a civil nuclear energy programme but not enrich uranium, while admitting that achieving such a deal "will not be easy".

Supreme Leader Ayatollah Ali Khamenei, who has the last say on Iran's state matters, rejected Washington's demands that Tehran stop refining uranium as "excessive and outrageous", warning that the talks are unlikely to yield results.

Among remaining stumbling blocks is Tehran's refusal to ship abroad its entire stockpile of highly enriched uranium - possible raw material for nuclear bombs - or engage in discussions over its ballistic missile programme.

Iran says it is ready to accept some limits on enrichment, but needs watertight guarantees that Washington would not renege on a future nuclear accord.

MOUNTING TENSIONS

Trump in his first term in 2018 ditched a 2015 nuclear pact between major powers and Iran. Since returning to office this year, he has restored a "maximum pressure" campaign on Tehran and reimposed sweeping U.S. sanctions that continue to hobble the Iranian economy.

Iran responded by escalating enrichment far beyond the 2015 pact's limits.

Wendy Sherman, a former U.S. undersecretary for political affairs who led the U.S. negotiating team that reached the 2015 agreement, said it was impossible to convince Iran to scrap enrichment - which Tehran touts as a matter of sovereignty.

"I don't think it is possible to get a deal with Iran where they literally dismantle their programme, give up their enrichment, even though that would be ideal," she told Reuters.

The cost of failure of the talks could be high. Iran's arch-foe Israel sees Iran's nuclear programme as an existential threat and says it would never allow Iran's clerical establishment to obtain nuclear weapons.

Israel's strategic affairs minister and the head of its foreign intelligence service Mossad will also be in Rome for talks with the U.S. team that is negotiating with Iran, a source aware of the matter told Reuters.

Araqchi said on Thursday that Washington would bear legal responsibility if Israel attacked Iranian nuclear installations, following a CNN report that Israel might be preparing strikes.

While rising U.S.-Iran tensions have put the nuclear talks in doubt, three Iranian sources said on Tuesday that the clerical leadership lacks a clear fallback plan if efforts to overcome the standoff collapse.

Source: Reuters