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Progress is Made on US Tax Reform; Oil Prices Fall
Published December 4, 2017
On Saturday, the US Senate narrowly approved a tax overhaul (51-49 vote), moving Republicans and Trump much closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes. Republican leaders predicted the tax cuts would encourage US companies to invest more and boost economic growth.
The US Dollar Index is higher today after the US Senate passed a tax bill on the weekend, boosting expectations for a faster pace of rate hikes from the Federal Reserve. The greenback is being fueled by expectations that tax cuts for corporations will stimulate the economy and drive Treasury yields higher, as the government becomes more dependent on debt due to reduced tax income.
Investors remained cautious amid concerns over the ongoing Russia probe, following reports on Friday that former national security advisor, Michael Flynn, is prepared to testify against Trump in the ongoing investigation. Flynn plead guilty on Friday morning to lying to the FBI about his communications with the Russian ambassador to the US in December 2016. Flynn also admitted to speaking with a top member of the Trump transition team regarding his communications with the ambassador.
Oil prices move lower on the day with Brent Crude down ~1.22% trading at 62.95 and WTI Crude down ~1.05% currently trading at 57.70.
Investors will look ahead to tomorrow’s trade deficit data out of Canada and the USA. The Bank of Canada’s interest rate decision is due at 10:00AM EST on Wednesday, with most experts expecting the central bank to hold its benchmark rate at 1.0%.