Banks say they are good for the economy

The “major and beautiful draft law” of US President Donald Trump – or officially, is the law of the Great Grand Law (OBBA) – is a controversial legislation, but some banks support it, saying that it is the shot in the arm that the economy needs.

It was developed in a Narrow 51-49 voting On the US Senate late Saturday, the large spending scale was transferred near the President’s office.

The draft law, which is characterized by comprehensive tax reforms and targeted incentives It is expected that you will add to the federal deficitHe caused warnings from credit agencies and Decree criticism.

But some banks say they believe that the bill can strengthen the American economy.

In a message published on Sunday, American bankers Association She said that she strongly supports many provisions in the draft law “tax exemption that affects the need.”

“I think OBB will undoubtedly be good for the American economy over the next two years compared to passing anything,” said David Seif, the chief economist in the advanced markets, given that taxes will increase significantly in the next year.

The tax cuts and jobs law, which was approved in 2017, includes low income tax rates, more tax credits on children, and generous discounts of companies. Without taking action in Congress, the validity of many rulings under law is scheduled to end by the end of 2025 – Analysts said that the transformation can reduce family consumption and corporate investment. They said that the appeal is short -term for the “beautiful bill” in its ability to avoid a sharp financial shrinkage in 2026.

Saif told CNBC: “The most important thing OBB is doing during the next few years is to renew most of the provisions of expired taxes, which prevents a large and sudden financial shrinkage.” He added: “OBB provisions that allow faster implementation of commercial investments for capital investments may provoke investment over the next two years, despite the most likely at the expense of investment in subsequent years.”

CITI strategists said, in a memorandum published last Wednesday, that the passage of the bill would be the economic wind. They wrote: “In the short term, commercial deals (UK, China, and in the end Japan, India, Europe, etc.) must impose a beautiful draft law (Safi) in July to improve the morale of growth.”

CITI also expects the Federal Reserve to dismantle its monetary policy and enhance growth morale, and she said, “We do not see the moment of guarding bonds during 2025/2026 where the BBB Delta is largely funded by customs tariff revenues.”

Debt burden is a major concern for many critics. Non -party Congress Budget Budget Projects BBB will add at least 3 trillion dollars To the federal deficit during the next decade.

Although Morgan Stanley noted in early June The provisions of the pro -growth tax in the draft law may benefit companies and individuals, as well as the main stock sectors such as telecommunications, industries and energy services, they may raise concerns about financial sustainability.

Likewise, Erica, Vice -President of Federal Tax Policy at the Federal Tax Policy Center, said, “It is financially inactive, which greatly increases the budget deficit and debt cases even when calculating growth,” said Erica, Vice President of Federal Tax Policy at the Federal Tax Policy Center.

York said that many tax cuts are complex and dangerous, which gives tax cuts to certain types of workers and left others.

Moreover, due to the draft law, which includes many tightly designed tax rules, the internal revenue service will need to spend more time and resources in updating models, guidance and enforcement tools, which adds to the administrative burden of an actually extended agency.