US: Americans Divided Over Role Of Govt As GOP Struggles To Finalise Legislation
May-08 17:16
A survey from the Pew Research Center has found that, “Majorities of Americans say the federal government has a responsibility to provide a wide array of support and services for the country – but there is more consensus about some domains than others.”
- Pew notes: “Nearly all Americans say the federal government has a responsibility to provide a strong military and secure the nation’s borders…. [but] Republicans and Democrats continue to be far apart when it comes to whether the federal government has a responsibility to provide health insurance for all Americans.”
- The data suggests that Americans are polarised about the role of the federal government as the GOP works on a reconciliation agenda that includes major cuts to discretionary spending and potentially major cuts to safety net programmes like Medicaid.
- Pew notes: "Americans who see a more limited role for the federal government are particularly likely to support the Trump administration’s recent cuts to departments and agencies."
Figure 1: Federal Government Responsibilities
Source: Pew Research Center
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FED: Goolsbee Pushes Uncertainty Angle, Not Waiting For Hard Data
Apr-08 17:10
Chicago Fed’s Goolsbee (’25 voter, dove) pushes the uncertainty angle under US trade policy in an appearance on public radio.
- "You just tell us what the conditions are going to be, and then we'll figure out what jacket to put on, right? And the thing is, now what jacket to put on is not clear”.
- He also noted that some Trump administration policymakers are saying that tariffs are not going to last and some saying tariffs will be put in place forever.
- Goolsbee said Trump's tariff increases have been "way bigger" than expected and he is not waiting for the hard data to come in and has spent time talking to consumers and firms in his region.
- "The anxiety I hear the most is this. We just lived through and learned what happens when the supply chain gets disrupted all through Covid. And we just lived through and learned what happens when inflation is raging out of control in '21 and '22. The anxiety is this is going to take us back to a thing we spent the last five years desperately trying to get away from, and is this just going to put us back where the lessons we never wanted to learn become super relevant again?"
- “We can’t really wait to the end of the quarter plus one month before we find out that investment really dropped off and GDP growth is shrinking, and we start seeing layoffs, unemployment, or on the other side, inflation starts soaring,”
Goolsbee had sounded his most hawkish in quite some time yesterday in a separate appearance:
- “The anxiety is if these tariffs are as big as what are threatened on the US side, and if there’s massive retaliation, and then if there’s counter retaliation again, it might send us back to the kind of conditions that we saw in ‘21 and ‘22, when inflation’s raging out of control,”
POLITICAL RISK: Italy’s Meloni To Meet Trump On Apr 17
Apr-08 17:07
- AFP reports that Italian PM Meloni will meet US President Trump on Apr 17.
- They quote her as: “"This is the negotiation that must see us all engaged and at all levels... and that involves me, who will be in Washington on April 17 and obviously I intend to address this issue with the US president,"”
- Bloomberg had previously touted Apr 16. See our broader political risk team's post after the Bloomberg report earlier, here.
- It sees a visit two days after part of potential retaliatory EU tariffs are placed on US imports.
US TSYS/SUPPLY: Review: 3Y Auction - Another Tail
Apr-08 17:07
- Still weaker, Treasury futures pare move off low after $58B 3Y note auction (91282CMW8) tails 2.4bp tail, drawing 3.784% high yield vs. 3.760% WI; 2.47x bid-to-cover vs. 2.70x prior.
- Peripheral stats see indirect take-up climb to 73.03% vs. 62.5% prior; direct bidder take-up 6.24% from 26.0% prior; primary dealer take-up 20.73% vs. 11.5% prior.
- The next 3Y auction is tentatively scheduled for May 5.
