President Trump faces key fiscal deadlines as second term begins
Published On Jan 21, 2025, 6:00 AM
President Trump's administration faces several key fiscal challenges during his second term, including raising the debt limit, preventing a government shutdown, and managing potential expirations of significant tax provisions from the Tax Cuts and Jobs Act by the end of 2025. With the U.S. reaching its debt limit, Treasury has begun using extraordinary measures to avoid default. The upcoming deadlines and the necessity for bipartisan support raise concerns about governance and potential market volatility. These fiscal battles could impact broader economic stability and government spending patterns, creating uncertainty for investors.
Stock Forecasts
SPY
Negative
The ongoing fiscal policy negotiations and potential for a government shutdown may lead to increased volatility in the market, particularly in sectors sensitive to government spending. Investors might consider equities that typically benefit from government contracts, or defensive sectors that can weather economic uncertainty, but caution is advised due to potential disruptions.
XLI
Neutral
As the debt limit discussions progress and potential tax changes loom, sectors potentially favored by tax cuts, like technology and consumer discretionary, could face pressure if cuts aren't extended. Conversely, infrastructure spending could provide opportunities, especially for companies aligned with those projects.
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