What happened?

Yesterday in a CBS interview, Elon Musk criticized the "big beautiful" tax bill that was just passed by the House and is due to be voted on in the Senate. This is the first time he openly speaks out against the current administration. In addition, three GOP senators publicly came out as a "no" vote on deficit concerns, putting a majority passage at risk.

0:00
/0:30

Source: CBS

Why does this matter?

  • Pushback gets louder: While the tax bill passed the House without much public attention, it has now moved squarely into focus. This complicates its passage considerably and makes adjustments likely.
  • US growth is slowing: The US economy faces various headwinds, from tariffs to reduced immigration. It would probably struggle to stomach a bill that actually shrinks the deficits.

What’s the counterpoint?

  • Trump controls the GOP: Senators may speak out now to sharpen their profile, but could ultimately fall in line quickly out of fear for the President's retribution.
  • The US is on the cusp of a productivity boom: AI and its impact on business efficiency may render today's deficit debate meaningless looking back several years from now.
finformant view It seems unlikely that the big beautiful bill will be passed in its current form. Expect a more balanced version. The bond market might ultimately like that outcome.
Subscribe Now