Dubai, 30 June 2025: Economist Wayne Cole of Reuters reported that investors are closely watching the sluggish progress of a massive U.S. tax-cut and spending bill still making its way through the Senate. Signs are growing that the legislation may not pass by former President Donald Trump’s preferred deadline of July 4.
To stall the process, Democrats are forcing clerks to read every line of the 940-page bill aloud — a move that, ironically, may make them the only ones who truly know its full contents.
The Congressional Budget Office (CBO) estimates that the bill would add approximately $3.3 trillion to the U.S. national debt over the next decade. This raises serious concerns about the appetite of foreign investors for U.S. Treasury bonds and poses another challenge to the long-held belief in “American exceptionalism.”
Cole highlighted that the most immediate market impact has been felt in the U.S. dollar, which weakened significantly last week. The euro climbed by 1.7%, making it one of the strongest performers. According to James Reilly, an analyst at Capital Economics, this year’s dollar slump is the steepest for this point in the calendar since the U.S. switched to a floating exchange rate in 1973.
The declining value of the dollar is likely pushing foreign investors to hedge their exposure to the U.S. currency — a trend that adds further downward pressure and feeds into a self-reinforcing bearish cycle.
As the political stalemate drags on, markets remain volatile. Investor concerns are compounded by expectations of policy easing from the Federal Reserve, with current forecasts pricing in a 65 basis point cut by year-end. A possible rate cut in July remains uncertain but could become more likely if the upcoming U.S. payrolls report shows a surprise downturn, especially if the unemployment rate rises above 4.3%, a level not seen since late 2021.
The economic narrative remains tense, with a fragile dollar, mounting fiscal concerns, and shifting central bank expectations all converging to create a period of deep uncertainty across global markets.
