This Week in Review | Trade Deal Deadline Extension, Big Beautiful Bill, US Debt (Jul. 11, 2025)

Transcript

Paige Tyson:

Hello, and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit fisherinvestments.com. Now, let's review what happened this week.

First, the US trade deal deadline extension.

Earlier this week, President Trump's initial 90-day trade deal deadline expired. Following President Trump's April 9th decision to postpone reciprocal tariffs for 90 days to allow for deal-making, many investors wondered what the July 9th deadline may bring. Would the pause be extended? Or would the reciprocal tariffs take effect? Well, this week we got our answer: President Trump issued an executive order that delays reciprocal tariffs' implementation until August 1st. The administration also sent letters to trade partners outlining the tariff rates planned for August. While this adds a bit more time for negotiations, many believe this three week extension won't lead to many finalized deals, and that another extension might be necessary. Maybe, but the administration seems willing to strike agreements, and we've seen limited retaliation from trade partners so far. Now, it's clear that tariffs could end up higher even if deals are reached, but the outcomes from negotiations with countries like China, the UK and Vietnam suggest things might not be as bad as markets feared— and pre-priced—earlier this year. And when reality is better than expectations, that's a bullish sign for stocks.

Next, more on the One Big, Beautiful Bill.

President Trump signed the One Big Beautiful Bill Act into law on July 4th. Since then, many investors have been digging into what that legislation might mean for their personal finances. This bill covers a wide range of policy areas, including tax regulations that will likely impact investors retirement planning. The bill cements many of the tax changes introduced in 2017's Tax Cuts and Jobs Act, while adding some new deduction opportunities. For example, the cap on the state and local tax deduction, or the SALT deduction, jumps from 10,000 to $40,000. Americans will also see a new $6,000 deduction for people over 65, deductions for tips and overtime pay and a deduction for interest payments on some car loans. Keep in mind, though, that some of these deductions are set to phase out in 2029. Additionally, the estate tax exemption for married couples increased to $30 million. This change might reduce the urgency for some families to make estate planning adjustments right now. Remember, when it comes to changes in tax laws and how they may impact you, it all boils down to your personal financial situation. Consulting with a financial or tax professional can help you assess what makes the most sense for you specifically.

Finally, the US Treasury market.

Looking beyond tax policy changes, the passage of the One Big Beautiful Bill has also sparked some concerns about its potential impact on US national debt and what that might mean for Treasury markets. The 10-year Treasury yield bumped up slightly as the bill moved closer to passing, with another bump higher after it became law. But in the days since, yields have fallen back down and are still below where they started at the beginning of the year. The market reaction to the bill's passage isn't surprising to us. That's because even with higher interest rates and rising absolute US debt levels in recent years, the cost to service the national debt are still in a range that has been manageable historically. Now, take a step back— Treasury yields have been largely rangebound since late 2022, between around 3.3% and 4.9% in that time. For context, from the late 1960s through the early 2000s, 10-year Treasury yields sat above 5%. And during that time, stocks and the US economy continue to grow, with particularly strong periods of stock market performance in the 1980s and 1990s despite those higher rates. The point here for investors is that Treasury yields at these levels don't automatically spell trouble for stocks. History shows us that they can coexist with economic and market growth.

That's it for this week! Thanks for tuning in to This Week in Review.

If you're looking for more insights, then don't miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit fisherinvestments.com anytime for our latest thoughts on markets. Thanks again for joining us and don't forget to hit like and subscribe!