Trump suggests DOGE look at Musk's companies to save money
Trump's comments come after billionaire Elon Musk renewed his criticism on Monday of Trump's sweeping tax-cut and spending bill, vowing to unseat lawmakers who backed it after campaigning on limiting government spending.
'Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!,' Trump said in a post on Truth Social.
In response to Trump's post, Musk, in his own social media platform X, said 'I am literally saying CUT IT ALL. Now.' After weeks of relative silence following a feud with Trump over the legislation, Musk rejoined the debate on Saturday as the Senate took up the package, calling it 'utterly insane and destructive' in a post on social media platform X.
On Monday, he ramped up his criticism, saying lawmakers who had campaigned on cutting spending but backed the bill 'should hang their heads in shame!'
'And they will lose their primary next year if it is the last thing I do on this Earth,' Musk said.
The Tesla and SpaceX CEO called again for a new political party, saying the bill's massive spending indicated 'that we live in a one-party country – the PORKY PIG PARTY!!'
'Time for a new political party that actually cares about the people,' he wrote. Musk's criticism of the bill has caused a rift in his relationship with Trump, marking a dramatic shift after the tech billionaire spent nearly $300 million on Trump's re-election campaign and led the administration's controversial Department of Government Efficiency (DOGE), a federal cost-cutting initiative.
Musk, the world's richest man, has argued that the legislation would greatly increase the national debt and erase the savings he says he has achieved through DOGE.
It remains unclear how much sway Musk has over Congress or what effect his opinions might have on the bill's passage. But Republicans have expressed concern that his on-again, off-again feud with Trump could hurt their chances to protect their majority in the 2026 midterm congressional elections.
The rift has also led to volatility for Tesla, with shares of the company seeing wild price swings that erased approximately $150 billion of its market value, though it has since recovered. (Reporting by Nandita Bose in Washington and Kritika Lamba, Shubham Kalia in Bengaluru, Editing by Colleen Jenkins and Rosalba O'Brien)
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The Star
4 hours ago
- The Star
Bonded to interest rates
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Bank Negara has also held the OPR steady at 3% in its recent meeting, but reduced the statutory reserve requirement (SRR) to 1% from 2% that resulted in the release of an additional RM19bil in liquidity into the banking system to support the economy. However, despite the SRR decision, experts said there was still a high risk for an OPR cut in the second half of the year. In comparison, the bond yield spread between the 10-year UST and the 10-year MGS stood at 0.84% on June 5, 2025, based on the Bond Pricing Agency Malaysia's (BPAM) data. The 10-year UST on that date was at 4.40% and the 10-year MGS was at 3.56%. BPAM chief executive officer Meor Amri Meor Ayob told StarBiz several challenges could weigh on the ringgit bond market in 2025, with US monetary policy being one of them. 'UST continues to offer relatively higher yields compared to MGS, which may limit the appeal of MGS going forward. 'Moreover, with growing expectations that Bank Negara may cut the OPR in the second half of the year, yield differentials could widen further, potentially dampening foreign appetite for ringgit-denominated bonds. 'If the Fed maintains the current interest rates while Bank Negara cuts its OPR, the widening yield between the UST and MGS differential could reduce the attractiveness of Malaysian bonds to foreign investors and put pressure on the local ringgit,' he added. Meor Amri said another challenge lies in geopolitical uncertainties, especially around US trade policies under President Trump's administration, which could trigger market volatility and risk-off sentiment. He said the recent surge in foreign demand for ringgit bonds in March and April 2025 was driven by uncertainty surrounding President Trump's flip-flopping tariff policies and his proposed 'One Big Beautiful Bill'. These developments have prompted some bond investors to reduce their exposure to UST and seek diversification in emerging market assets such as MGS, he noted. Foreign net buying of Malaysian bonds surged to RM10.2bil in April this year compared to RM3.2bil in March, marking the second consecutive month of net inflows, despite 'Liberation Day' tariffs announced on April 2, 2025. The increase was primarily driven by strong demand for MGS and government investment issues (GII), which attracted RM9.7bil of inflows (March inflow: RM3bil), as well as the shorter-term Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB). OCBC Bank (M) Bhd head of global markets Stantley Tan said the future demand from foreign investors for ringgit-denominated bonds would largely depend on a variety of macroeconomic and domestic factors. Since the onset of 2025, he said global economic uncertainties have escalated, primarily due to rising geopolitical risks and inconsistencies in US tariff policies. He said the imposition of substantial trade tariffs by the United States on its trading partners has disrupted global trade flows and increased the risk of a recession, particularly within the United States. As trade negotiations continue, investors have also rebalanced their portfolios, reallocating investments towards emerging markets and economies less impacted by the tariff conflicts. 'On the domestic front, Bank Negara has reiterated its confidence in the resilience of Malaysia's economy, which is fundamentally supported by robust domestic demand. 'However, the tone of the monetary policy committee (MPC) statement has shifted from cautious optimism to a neutral-dovish stance, reflecting the heightened external risks. 'In its latest meeting, the MPC reduced the SRR by 1% to provide additional liquidity support to the economy,' Tan said. He said the ringgit bond market has started to price in the possibility of a policy rate cut in the coming months following the central bank's slightly dovish tone. However, he said the risks to the current bond valuations remain, particularly if the economy proves resilient, prompting Bank Negara to hold policy rate steady, which could lead to a repricing of the bond market. 'A significant fiscal improvement by the government could mitigate the risk of a sell-off by easing the supply of MGS and GII in future issuances. Additionally, external risks may arise from the potential resolution of the US fiscal situation, which is currently under intense scrutiny by global investors. Should the US fiscal outlook improves, there is a possibility that investors may shift back to safe-haven assets, resulting in potential outflows from emerging markets including Malaysia,' Tan noted. RAM Rating Services Bhd economist Nadia Mazlan said foreign investor appetite for Malaysian bonds may continue to be under pressure in 2025 amid continued heightened uncertainties arising from US protectionist trade policies. She said the 'risk-off' sentiments among investors at the start of the year and at the onset of the 'Liberation Day' tariffs have already triggered a sell-off across both the equity and bond markets, including in Malaysia. Nadia said while there was some temporary reprieve from the postponement of higher reciprocal tariffs and signs of easing US-China trade tensions, which contributed to the net inflows in March and April, the continued unpredictability of US policies may still haunt global investors. 'The continued easing of market volatility recently may help support investor appetite for risker emerging market bonds in the short term, but it may be capped by the still-elevated uncertainties, especially as the 90-day pause on higher reciprocal tariffs is nearing its end. 'The potential future volatility from other proposed tariffs will likely leave foreign investors teetering on the edge,' she said. However, she said a tapering yield differential between the UST and MGS may help buoy some foreign demand for domestic bonds this year. 'With the Fed widely expected to reduce the federal funds rate in the face of slower economic growth, Bank Negara is expected to keep its OPR at 3%. This could help compress the UST-MGS yield spread, which should increase the appeal of Malaysian bonds and strengthen the ringgit this year. 'The country's strong economic fundamentals and prudent fiscal discipline also play important roles in making the country an attractive investment destination. 'Therefore, maintaining stable and effective domestic policies is essential to strengthening foreign investor confidence while ongoing improvements in fiscal metrics could further support demand for Malaysian bonds,' Nadia added.
The Star
4 hours ago
- The Star
Trump's 35% tariff threat feeds Japan's worst-case scenario fear
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"There is some risk of a US tantrum that results in higher punitive actions by Washington this month,' said Kurt Tong, a former senior US diplomat in Asia who's now a managing partner at the Asia Group. "If that happens, Japan may have no choice but to hit back with its own specific countermeasures.' Trump's latest threat fits in with a high-pressure deal-making strategy that sometimes results in big last-minute concessions on both sides, as seen with China, but market players still need to game out how to position themselves should talks founder. While few analysts see Japan's stocks collapsing on a no-deal scenario, some of them forecast the Nikkei 225 to fall into the 38,000 range, a decline of more than 4%, rather than rallying above 40,000 if there's an agreement. The Nikkei 225 edged down 0.6% to close at 39,762 on Wednesday while the yen was trading at 143.88 against the dollar, down around 0.3%. Japan has so far stood firm in negotiations over across-the-board reciprocal tariffs, insisting that they be removed along with additional sectoral tariffs on autos, steel and aluminum. The car duties are particularly painful for Japan as the industry contributes the equivalent of almost 10% of gross domestic product and employs around 8% of the workforce. Tokyo has insisted that a "win-win' deal must encompass all the tariffs in one go with Ishiba preferring no deal to a bad deal ahead of a July 20 upper house election. The prime minister on Wednesday reiterated his view that focusing on jobs and investment in the US was the way forward, just like it was for Nippon Steel as it patiently sought to change Trump's view and take over US Steel. "Japan is the biggest global investor in the US and the world's biggest contributor to US jobs,' Ishiba said in Tokyo on Wednesday. "That means Japan is different from other countries.' But as July 9 gets closer, some observers say more needs to be done to convince the US to back off. "We have to work on Trump himself, to first try to avoid the tariffs to be imposed from July 9,' said Ichiro Fujisaki, former Japanese ambassador to the US, adding that the president's remarks show that Tokyo hasn't brought enough to the table yet. "We don't have something like rare earths but the US is dependent on Japanese industry as well. About half of materials for making semiconductors come from Japanese industry,' Fujisaki said, pointing to a possible area of leverage, too. In the meantime, market players are evaluating the potential scale of the fallout. "There is a lot more risk of things falling apart than is being priced in by the market,' said Zuhair Khan, a fund manager at UBP Investments. "There is always the risk of a policy blunder by either side.' He points to the 32,000 Nikkei level on the day Trump first announced the reciprocal tariffs. "If the probability of a no deal is 25% then the Nikkei should be at 38,000.' What Bloomberg Economics Says... "If Japan is ultimately forced to pay reciprocal tariffs at those rates, on top of the 24% rate announced on 'Liberation Day' - currently suspended at 10% - the macroeconomic fallout would be sizable. Our estimate through a model of global trade suggests a medium-term GDP hit of around 1.2%, roughly double the 0.6% drag expected under the current levy.' - Taro Kimura, economist For the full report, click here. The point of imposing a deadline in negotiations is to create an opportunity for leverage, so it's not surprising to see Trump pushing high tariffs as a threat to push for better deals as the date approaches, said Phillip Wool, head of portfolio management at Rayliant Global Advisors Ltd. "There's also an element of political theater here, as Trump's narrative to American voters is that the US has been bullied on trade for so long, and there's clearly a desire to look 'tough' on trade,' Wool said. "But there has to be a face-saving deal at some point so that it looks like the negotiation was truly a success as opposed to the mutually assured destruction of impasse and perpetually high tariffs.' Like some other market players, Wool is wary of an overly pessimistic knee-jerk response to each remark Trump makes. If there is a big selloff in a worst-case scenario, Wool sees it as a great buying opportunity for long-term, active investors. Strategists are split on how a bad scenario might play out for the yen. While some such as SBI Liquidity Market Co.'s Marito Ueda see the possibility of risk aversion sparking a strengthening of Japan's currency to the 138 range against the dollar, others see a weakening as more likely. A stalemate in trade talks would likely delay the Bank of Japan's next interest rate hike, especially if it led to tariffs of up to 35% in the meantime, said Akira Moroga, chief market strategist at Aozora Bank. Movement would slow after the 145 mark, making a push past 147 difficult, he said. Still, the consensus is that a deal will be reached sooner or later, and that Japan will have to concede more ground to achieve it. "If it's concluded I don't think it's going to be a win-win situation,' said Fujisaki. "Maybe a capital-letter 'WIN' for US, but a small letter 'win' for Japan.' --With assistance from Momoka Yokoyama, Toshiro Hasegawa, Umesh Desai, Hidenori Yamanaka, Mari Kiyohara, Aya Wagatsuma and Akemi Terukina. - Bloomberg
The Sun
5 hours ago
- The Sun
Gaza rescuers say Israeli strikes kill 14 as Trump teases ceasefire push
GAZA CITY: Gaza's civil defence agency said that Israeli strikes killed at least 14 people on Wednesday, as US President Donald Trump urged Palestinian group Hamas to agree to a 60-day ceasefire. After nearly 21 months of war which has created dire humanitarian conditions in the Gaza Strip, home to more than two million people, the Israeli military said this week it had expanded its operations. In southern Gaza on Wednesday, civil defence spokesman Mahmud Bassal told AFP that five members of the same family were killed and several others wounded in an Israeli air strike that hit a tent housing displaced people in the coastal Al-Mawasi area. AFP images from the nearby Nasser Hospital, in Khan Yunis city, showed medics treating young children covered in blood. Some appeared terrified while others lay still on hospital beds in bloodied bandages and clothes. Despite being declared a safe zone by Israel in December 2023, Al-Mawasi has been hit by repeated Israeli strikes. Further north, Bassal said that four people from the same family were killed in a pre-dawn Israeli air strike on a house in Gaza City, and another five in a drone strike on a house in the central Deir el-Balah area. Media restrictions in Gaza and difficulties in accessing many areas mean AFP is unable to independently verify the tolls and details provided by rescuers. Contacted by AFP, the Israeli military requested precise coordinates for the targeted locations and said it 'will try to look into' the reports. 'End the war' On Tuesday the military said that in recent days its forces had expanded operations across Gaza, 'eliminating dozens of terrorists and dismantling hundreds of terror infrastructure sites'. After months of stalled mediation efforts to bring an end to the war, Trump on Tuesday said on social media that a new ceasefire proposal has Israel's support. 'Israel has agreed to the necessary conditions to finalize the 60 Day CEASEFIRE, during which time we will work with all parties to end the War,' Trump said. He added that Qatari and Egyptian mediators, who have been in direct contact with Hamas throughout the war, would deliver 'this final proposal'. 'I hope, for the good of the Middle East, that Hamas takes this Deal, because it will not get better -- IT WILL ONLY GET WORSE.' Trump is due to host Israel's Prime Minister Benjamin Netanyahu at the White House next week. Israel launched its offensive in response to Hamas's October 7, 2023 attack which resulted in the deaths of 1,219 people, mostly civilians, according to an AFP tally based on Israeli official figures. Israel's retaliatory military campaign has killed at least 56,647 people in Gaza, also mostly civilians, according to Hamas-run territory's health ministry. The United Nations considers these figures to be reliable.
