US: Speaker Says Tentative Deal Reached On SALT; Plan To Do Floor Vote 'Tonight'
May-21 11:48
Speaker of the House Mike Johnson (R-LA) has seemingly confirmed an agreement has been reached on a boost to the cap on state and local tax (SALT) deductions, one of the major issues holding up passage of the so-called 'Big, Beautiful Bill'.
- Lauren Fox at CNN posts on X: "[Johnson] confirmed tentative SALT deal of raising cap to $40,000 for certain income groups -said manager's amendment coming soon. He also said this about conservative reaction to SALT: "No one is delighted by that but they understand the necessity of handling the issue and keeping the majority." On timing of passage: "We plan to do it tonight. That's my plan. Stay tuned."
- Late on 21 May, Politico reported that "Johnson and a group of blue-state Republicans have reached a critical but tentative deal to boost the cap on state and local tax deductions to $40,000 [...] The new deduction cap, which would be per household, will be limited to taxpayers making below $500,000. Under the tentative deal, the income cap and the deduction will grow 1 percent every year over a ten-year window. The deduction stays in place after the 10-year window and doesn’t snap back to previous levels."
- While Johnson claims a deal with GOP budget hawks has been reached, Rep. Any Harris (R-MD) tells Newsmax that they are “actually further away from the deal, because that SALT cap increase, I think, upset a lot of conservatives again.”
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US TSY FUTURES: Extending Lows
Apr-21 11:11
- Futures extending lows again, sellers meet limited buy interest, low overall volumes volumes at Jun'25 10Y trades down to 110-30 (-7.5), total volume just over 151k. 10Y yield climbs to 4.3676% (+.0427).
- Initial Technical support below at 110-15/109-08 (Low Apr 15 / 11 and the bear trigger); Continued weakness would refocus attention on 109-08, the Apr 11 low. A break of this level would resume the downtrend.
LOOK AHEAD: Monday Data Calendar: Chicago Fed Goolsbee, Leading Index, Tsy Bills
Apr-21 11:05
- US Data/Speaker Calendar (prior, estimate)
- 21-Apr 0830 Chicago Fed Goolsbee interview on CNBC
- 21-Apr 1000 Leading Index (-0.3%, -0.5%)
- 21-Apr 1130 US Tsy $76B 13W, $68B 26W bill auctions
US TSYS: Curves Twist Steeper, Bonds Under Pressure
Apr-21 10:54
- US markets returning from Easter holiday to Treasury curves twisting steeper, bonds under pressure on lighter volumes as European markets remain closed for Easter Monday.
- Currently, Jun'25 2Y & 5Y contracts trade +1-2, 10Y -3.5 at 111-02, 30Y bond -20 at 113-30. 10Y yield +.0291 at 4.3540%.
- Wires continue to report Pres Trump's wishes to interfere with the independent Federal Reserve by sacking Fed Chairman Powell, not to mention ongoing tariff related headlines.
- Initial technical support for TYM5 below at 110-15/109-08 (Low Apr 15 / 11 and the bear trigger). Resistance at 111-17+ (High Apr 16). Volume in 10s just under 130k.
- Cross asset update: US$ falls to early Jan '24 levels, BBG $ index -9.6 at 1215.08; Gold climbs to new intra-day all-time high of 3397.75; stocks weaker SPX eminis -53.50 at 5259.25.
- Limited data today: Leading index at 1000ET, Chicago Fed President Goolsbee interview on CNBC at 0830ET. Tsy bill auctions at 1130ET: $76B 13W & $68B 26W bills.
