Treasury yields lower as investors await June's big jobs report
At 2:57 a.m. ET, the benchmark 10-year yield was 4 basis points lower to 4.253%. The 30-year bond yield was also down over 4 basis points at 4.781%. The 2-year Treasury yield was lower over 2 basis points at 3.772%.
One basis point is equal to 0.01%, and yields move inversely to prices.
Investors are anticipating the Bureau of Labor Statistics' June nonfarm payrolls report on Thursday, which measures the number of workers employed in the U.S. economy.
Economists polled by Dow Jones are expecting that the economy added 110,000 jobs last month, lower than 139,000 in May. The unemployment rate is also forecast to increase to 4.3%, up from 4.2% in May.
That's after the ADP payrolls report on Wednesday showed that private sector hiring decreased by 33,000 last month.
Investors are also keeping an eye on Trump's "one big beautiful bill" which passed the Senate on Tuesday and has now returned to the House, where some Republican lawmakers remain fiercely opposed to the bill. The mega-spending bill is expected to add $3.3 trillion to the fiscal deficit over the next decade.
On the trade front, Trump announced on Truth Social that the U.S. had come to a deal with Vietnam, which includes a 20% tariffs on imports from the country. Goods that were manufactured in another country, but were transferred to Vietnam before final shipment to the U.S., will face a levy of 40%.
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Forbes
an hour ago
- Forbes
These 26 Rich Private Colleges Just Got A Tax Cut From Republicans
S trange things happen when details of a massive tax and budget bill, like the one President Donald Trump signed yesterday, are tweaked behind closed doors. Among them: A couple dozen of the nation's wealthiest small private colleges will be getting a tax cut next year, even as bigger rich universities, including Princeton, MIT, Yale and Harvard, will be slammed with higher taxes. It all began as an effort by House Republicans to dramatically raise the excise tax imposed on the earnings of college endowments, and particularly the endowments of wealthy 'woke' schools like Harvard University that they (and President Donald Trump) have targeted. But as it turns out, while Harvard's tax bill will likely more than double, some smaller schools with famously left-leaning student bodies (e.g. Swarthmore College and Amherst College) are getting tax relief. That's because schools with fewer than 3,000 full-time equivalent tuition-paying students will be exempt from the revamped endowment tax beginning next year. It currently applies to private schools with more than 500 full-time equivalent tuition-paying students and endowments worth more than $500,000 per student. Using the latest available federal data from fiscal year 2023, Forbes identified at least 26 wealthy colleges that are likely subject to the endowment tax now, but will be exempt next year based on their size. Along with top liberal arts schools like Williams College, Wellesley College, Amherst and Swarthmore, the list includes the California Institute of Technology, a STEM powerhouse, and the Julliard School, the New York city institution known for its music, dance and drama training. Grinnell College in Iowa, which enrolled 1,790 students in 2023, will save around $2.4 million in tax each year as a result of the change, President Anne Harris said in an email to Forbes . Here's what happened. As passed by the House in late May, the One Big Beautiful Bill (its Trumpian name) increased the current 1.4% excise tax on college endowments' investment earnings to as high as 21% for the richest institutions—those with endowments worth more than $2 million a student. (While these schools are all non-profits and traditionally tax exempt, the 1.4% tax on investment earnings was introduced by Trump's big 2017 tax bill. According to Internal Revenue Service data, 56 schools paid a total of $381 million in endowment tax in calendar 2023.) Along with raising the rate, the House voted to exempt from the tax both religiously-affiliated schools (think the University of Notre Dame) and those that don't take federal student financial aid. (The religious exemption was structured in a way that Harvard, founded by the Puritans to train ministers, wouldn't qualify.) The House also sought to penalize schools like Columbia University, with heavy international student enrollments, by excluding students who aren't U.S. citizens or lawful permanent residents from the per capita calculations. Then the bill went to the Senate, where the Finance Committee settled on more modest–albeit still stiff–rate hikes. Schools with endowments of $500,000 to $750,000 per capita would still pay at a 1.4% rate, while those with endowments above $750,000 and up to $2 million would pay 4%. Those with endowments worth more than $2 million per student would pay an 8% tax on their earnings, not the 21% passed by the House. Enter Senate Parliamentarian Elizabeth MacDonough, who makes decisions on the Senate's Byrd rule, which requires parts of a budget reconciliation bill like this one to have a primary purpose related to the budget—not other types of policy. The Byrd rule was put in place because reconciliation isn't subject to filibuster. 'You can't get into a lot of prescriptive activity' in a budget reconciliation bill, explains Dean Zerbe, a national managing director for Alliantgroup, who worked on college endowment issues back when he was tax counsel for Sen. Chuck Grassley (R-Iowa). 'Like, 'you've got to hop on one foot,' or 'you've got to make tuition affordable,' or 'you've got to do better in terms of admission.'' The Parliamentarian ruled that those three House provisions—exempting religious-affiliated schools, exempting schools that don't take federal aid, and excluding foreign students from the per capita calculation—didn't pass the Byrd test. At that point, Republican senators settled on the 3,000-student threshold in large part to specifically exempt one school from the tax: Hillsdale College, an ultra-conservative, Christian liberal arts college in Hillsdale, Michigan and a GOP darling. It enrolled 1,794 students in 2023, had an endowment worth $584,000 per-student, and notably accepts no federal money, including student aid. (So both the religious exemption and the one for schools taking no federal student aid would have presumably shielded Hillsdale from the endowment tax—before the Parliamentarian gave them the thumbs down.) There was also a broader group of small schools pushing for the exemption, notes Jonathan Fansmith, senior vice president for government relations and national engagement at the American Council on Education. 'They made an argument that I think got some positive reception among Republican senators of saying that essentially, while their endowments may be big relative to the fact that they have small student bodies … their endowments weren't big.' A school like Amherst, he adds, 'might have a big endowment for a small school, but they don't have a big endowment relative to the Ivies and the more heavily resourced [universities].' House Republicans, under intense pressure to meet Trump's July 4th deadline, ended up accepting the final Senate product in full. That meant exempting the smaller schools, including the 'woke' ones, while levying a rate of up to 8% on the endowments of bigger schools. Congress' Joint Committee on Taxation estimates colleges will now pay an extra $761 million in tax over 10 years, compared to the extra $6.7 billion they would have paid under the House version with its higher 21% rate and broader reach. Based on data from 2023, Forbes estimates that at least 11 universities will have their endowment earnings taxed at an 8% or 4% rate in 2026, while five will continue to pay the 1.4% rate. Three schools—Princeton University, Yale University, and the Massachusetts Institute of Technology—will likely be required to pay an 8% excise tax on their endowment earnings. Another eight, including Harvard, Stanford University, Dartmouth College and Vanderbilt University, will likely pay a 4% tax. The remaining five schools—Emory University, Duke University, Washington University in St Louis, the University of Pennsylvania, and Brown University—would pay the same 1.4% endowment tax rate they're paying now, based on fiscal 2023 numbers. One school that will likely pay 4% is the University of Notre Dame, a Catholic-affiliated school which would have been exempt from the tax were it not for the Byrd rule. 'We are deeply disappointed by the removal of language protecting religious institutions of higher education from the endowment tax before passage of the final bill,' Notre Dame wrote in a statement to Forbes . 'Any expansion of the endowment tax threatens to undermine the ability of a broad range of faith-based institutions to serve their religious purpose. We are proud to have stood with a coalition of these institutions against that threat, and we are encouraged by the strong support for a religious exemption received from both chambers.' Fansmith, for his part, won't call the exemption of the small schools a win. 'We think the tax is a bad idea and it's bad policy, and no schools should be paying it. But, by the standard that fewer schools are paying, it's better, but it's still not good,' he says. 'It's not really about revenue,' adds Fansmith. 'It's really about punishing these schools that right now a segment of the Republican party doesn't like.' The schools make the argument that it's students who are being punished, since around half of endowment spending pays for student scholarships. Meanwhile, Zerbe warns the now exempt schools shouldn't take that status for granted. 'Once revenue raisers are in play and out there, they come back again and again,' he says. 'It would be a disaster for [colleges] to think somehow this was a win for them. This was a billion dollar hit on them and there's more to come later.' More from Forbes Forbes Here's What The Senate Budget And Tax Bill Means For Colleges By Emma Whitford Forbes Trump's Foreign Student Crackdown Puts These 16 Struggling Colleges At Risk By Emma Whitford Forbes Trump's Visa Ban Is Barring New Foreign Doctors From Entering U.S. By Emma Whitford Forbes What The One Big Beautiful Bill Act Will Mean For You And Your Business By Kelly Phillips Erb
USA Today
an hour ago
- USA Today
How save thousands stacking Trump's new tax credits for cars with Biden's
If you've been thinking about buying a new electric vehicle, you could have as little as three months to bundle tax credits from both Joe Biden's and Donald Trump's administrations. Consider how each president's signature piece of legislation could help you save on a new car: ◾ 2022 Inflation Reduction Act: The Biden-era incentive gives you up to a $7,500 tax credit for new, plug-in EVs or fuel-cell electric vehicles. Trump's massive tax and spending policy bill will end this credit as early as Sept. 30. ◾ 'Big Beautiful Bill': Trump's new law offers an annual tax credit of up to a $10,000 on the interest of loans for new vehicles as long as they're less than 14,000 pounds and assembled in the United States. It covers purchases made in 2025 through 2028. How long Biden's and Trump's tax credits for new cars last More: What new version of Trump's 'Big, Beautiful Bill' could mean for EV car buyers and automakers How to stack the auto tax credits Here's how combining Biden's and Trump's tax credits over the next four years could save you a hunk of money on an EV: A new EV might not be the best investment To be sure, this strategy might not be the best way to stretch your dollar. But perhaps you're set on purchasing a new EV with the latest gadgets and upgrades. The average price paid for a new EV this year has been $57,734, according to Kelley Blue Book. Even with the $7,500 tax credit, the EV premium over a gas-powered car is about $1,500. The math tips in favor of EVs when you look at the five-year fuel costs: $9,490 for gas-powered vs. $4,295, according to Kelley Blue Book. If you can live without the new-car smell, used EVs' average listing price this year is about $20,000 less than for new models, according to Kelley Blue Book. You can also get a $4,000 tax credit from Biden's legislation for a used EV, but that wouldn't qualify you for the Trump tax credit. Some additional fine print to consider if you use either of these tax credits ◾ Big Beautiful Bill: The tax credit for auto loans phases out for incomes between $100,000 and $150,000 for an individual and between $200,000 and $250,000 if you file jointly. It's not available for fleet purchases, commercial vehicles or leasing. ◾ Inflation Reduction Act: To take advantage of the EV credit, you also must buy the car − assembled in North America − for your own use. Your income must to fall below $150,000 for an individual and $300,000 for those filing jointly.
Yahoo
an hour ago
- Yahoo
I Asked ChatGPT: Should Retirees Follow Trump's Money Moves or Musk's?
President Trump and Elon Musk took different paths to becoming billionaires. Trump used real estate and leverage as his claim to fame, while Elon Musk started many companies in innovative industries. Be Aware: Learn More: While young professionals can use Trump and Musk as examples for building generational wealth, retirees want to preserve their nest eggs. Trump and Musk may not seem like the best aspirations for retirees who want to play it safe, but I decided to ask ChatGPT. Would the AI robot tell us to steer clear from both of them, or choose a winner between the two of them? Here's what ChatGPT told me. I first asked ChatGPT to list the money moves of President Trump and Elon Musk, starting with Trump. These are the money moves ChatGPT associated with Trump: Leverage real estate: Use debt to buy and build high-profile properties. Trump also licensed his name for some of the properties instead of owning them, which reduced his risk. Leverage debt: He has used debt from various banks to fund large deals while never declaring personal bankruptcy. However, he has declared bankruptcy for some of his businesses. Build a personal brand: Trump built a personal brand for himself before it was mainstream. Doing this made the 'Trump' name very valuable and helped him start 'The Apprentice.' Avoid traditional stock investing: This advice isn't practical for every retiree, but Trump has always preferred real assets over paper assets. Tax optimization: Trump looks for creative ways to save taxes, and real estate gives him a lot of advantages through depreciation and loopholes. Profiting from media exposure: Trump refers to media exposure as free advertising, which helped build his personal brand and lead to new opportunities. I Asked ChatGPT What Will Get More Expensive When Trump's Tariffs Go Into Effect: Shortly after listing President Trump's money moves, ChatGPT went to work listing Musk's money moves. Here's what it came up with: Bet big on yourself: Musk has made aggressive bets into his own companies with his own cash. He continues to pour significant capital into his ventures instead of resting on his laurels. Delay lifestyle inflation: Musk lived modestly for many years after becoming a billionaire, which allowed him to pour more money into his companies. He's also a minimalist. Reinvest instead of diversifying: Musk reinvests profits back into his businesses instead of creating a diverse portfolio. This strategy isn't the best for people who stick with index funds. Solve big problems: If you address big problems, you can make big money. However, retirees may be more focused on preserving their nest eggs. Borrow against assets: If you do not sell your assets, you pay a lot less in taxes. Then, you can pass them on to your heirs with a step-up basis applied. Buy, borrow, die is a popular model for preserving generational wealth. Embrace extreme risk tolerance: This advice isn't good for retirees who want to play it safe, but young professionals shouldn't be afraid of taking risks. However, Musk went on the extreme side and was on the brink of bankruptcy with Tesla, even after selling PayPal for a fortune. Engineer, don't speculate: Musk doesn't day trade or speculate how things will go in the short run. Investors can take this advice and spend time in the market instead of timing the market. ChatGPT said it is 'generally not advisable' to follow the money moves of President Trump or Elon Musk if you are a retiree. Both billionaires have high-risk tolerances and long-term horizons that aren't feasible for retirees. They also have massive personal brands and access to exclusive information that makes them hard to beat. I pushed ChatGPT to make a choice, and while you can tell the machine was reluctant to recommend either one of them, Trump came out as the winner. 'While still high-risk, Trump's focus on real estate income and tax management may offer some adaptable elements for retirees — if done conservatively and with professional support.' ChatGPT didn't offer the same praise for Musk. While the answer would have been different if I had asked ChatGPT if Musk's money moves are good for young professionals, here's what the AI tool said about retirees: 'Musk's approach is designed for those in wealth-building mode, not for those in capital-preservation or income-drawing phases like most retirees.' Trump takes the crown in this battle from the top of one of his skyscrapers, while Musk rides off in a self-driving Tesla accompanied by a fleet of his robotaxis. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on I Asked ChatGPT: Should Retirees Follow Trump's Money Moves or Musk's? Sign in to access your portfolio
