Big. Beautiful. Also bankrupt?

Daily update

US President Trump urged Congress to pass the “big, beautiful” budget. An International Monetary Fund (IMF) official urged the US to consider its unsustainable debt level, which this budget will likely make worse. The redistribution effects of the tariffs, spending cuts, and tax cuts does have long term implications. In the short term, the deficit’s size is likely the focus.
Countries are not like casinos or hotel resorts—declaring bankruptcy is not really a thing. The US also has record amounts of wealth that could be mobilized to fund the debt. Fiscal concerns need to be considered within these constraints. The current angst may reinforce the position of fiscal conservatives in budget negotiations.
South Korea’s trade data for the first twenty days of May had predictable declines in exports to the US, and to China (as the final stage of complex supply chains selling to the US). Also predictably, items like autos and steel (heavily taxed by Trump) saw weakness. Stockpiling in anticipation of taxes helped semiconductor exports.
UK April inflation data jumped, as expected. Tax changes for electric vehicles and the UK’s peculiar energy pricing structure made this inevitable. The timing of Easter also had an impact (via things like leisure travel). There is nothing to really shock the Bank of England.