In Portfolioticker today
- Energy: Oil and Gas Futures
- AU: Westpac-Melbourne Institute Consumer Sentiment Index. Dec 2017
- EU: Employment (National accounts). Q3/2017
- EU: Industrial production. Oct 2017
- US: CPI. Nov 2017
- US: Mortgage Applications Fall 2.3%
- US Federal Budget Surplus
- US: FOMC Monetary Policy
- US: Congress Tax Compromise
Today at the stock market
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
“The S&P 500 ended slightly lower on Wednesday pressured by the financial sector after the Federal Reserve announced a widely expected interest rate hike but kept its rate outlook for coming years even as it projected faster U.S. economic growth.
The ¼ point rise in the overnight lending rate, which marked the 3rd hike this year, came along with an increase to the Fed’s 2018 gross domestic product growth forecast to 2.5% from 2.1%.
The Dow and the Nasdaq ended higher but the S&P could not sustain gains in choppy trading after the Fed statement.
- The S&P 500 index fell 1.26 points, or 0.05%, to 2,662.85
- The consumer staples sector was the strongest of the S&P’s 11 sectors with a 0.5% gain.
- The S&P utilities sector pared gains after hitting a session high to end up 0.3%.
- The Dow Jones Industrial Average index rose 80.63 points, or 0.33%, to 24,585.43
- The Nasdaq Composite index rose 13.48 points, or 0.2%, to 6,875.80
- Advancing issues outnumbered declining ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored advancers.
- The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 67 new highs and 46 new lows.
- Volume so far on U.S. exchanges was 6.77 billion shares, compared to the 6.53 billion average for the full session over the last 20 trading days.
The S&P was dragged lower by a late-session tumble in bank stocks, which tend to get a profit boost from higher interest rates. The financial sector’s 1.3% drop for the day suggested, however, that investors may have expected a more hawkish Fed.
“It’s a fairly dovish statement which is positive for risk assets. Always the worry with the market is if the Fed pushes back too hard and takes away the punch bowl. It just doesn’t seem that they’re setting the table for that at all,” said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia.
Investors were also keeping a sharp eye on progress in the Republicans’ push for a U.S. tax law overhaul that would involve a corporate tax cut.
Shortly before the Fed news, congressional Republicans said they had reached a deal on tax legislation and U.S. President Donald Trump said he would back a corporate tax rate of 21%.
“The equities market is also reacting to the possibility that Congress may have a tax plan on the president’s desk by the end of the year,” said Quincy Krosby, chief market strategist, Prudential Financial, Newark, New Jersey.
Earlier in the day a Labor Department report showed underlying consumer inflation slowed in Nov 2017, possibly affecting the pace at which the Fed hikes rates.
Investors also assessed Democrat Doug Jones’ victory in a bitter fight for a U.S. Senate seat in deeply conservative Alabama on Tuesday. Some participants said his win could mean trouble for Trump’s policy agenda as it narrows the Republicans’ already slim majority in the Senate.” Reuters
|Index||Ticker||Today||Change||31 Dec 16||YTD|
|S&P 500||SPX (INX)||2,662.85||-0.05%||2,238.83||+18.93%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 16||YTD|
Portfolio stock prices
|Stock||Ticker||Today||Change||31 Dec 16||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) fell 0.7%, the first retreat in more than a week.
The EUR rose 0.7% to USD 1.1826, the biggest increase in three weeks.
Britain’s GBP rose 0.7% to USD 1.3416.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
“Stocks of crude oil in the United States fell by 5.117 million barrels in the week ended 8 Dec 2017, following a 5.61 million drop in the previous period and compared with market expectations of a 3.78 million decline.
Gasoline inventories went up by 5.664 million, following a 6.78 million rise in the previous week and much higher than market expectations of a 2.457 million increase.
Crude Oil Stocks Change in the United States averaged 0.06 BBL/1Million from 1982 until 2017, reaching an all time high of 14.42 BBL/1Million in Oct 2016 and a record low of -15.22 BBL/1Million in Jan 1999.” TradingEconomics
“Crude fell below $57/barrel after the U.S. Energy Information Administration reported that production is rising to keep up with falling inventories.” Bloomberg
Prices are as at 15:48 ET
- NYMEX West Texas Intermediate (WTI): $56.67/barrel -0.82% Chart
- ICE (London) Brent North Sea Crude: $62.50/barrel -1.33% Chart
- NYMEX Natural gas futures: $2.70/MMBTU +0.71% Chart
AU: Westpac-Melbourne Institute Consumer Sentiment Index. Nov 2017
“ The Westpac Melbourne Institute Index of Consumer Sentiment rose 3.6% to 103.3 in December from 99.7 in November
This is a surprisingly strong result and confirms the lift we have seen in the Index over the last three months. The average reading for the Index in the December quarter is 5% above the average for the September quarter when we saw a disturbing slump in consumer spending. This result is supportive of the view that consumer confidence may have bottomed out during that September quarter.
In turn, growth in consumer spending is likely to have also bottomed out in the September quarter. However, with ongoing weak income growth; a low savings rate; and high debt levels we cannot be confident that consumers have the capacity to sharply lift spending despite higher confidence.
A less threatening outlook for interest rates appears to have boosted confidence. During that September quarter households were spooked by media and many commentators saying that interest rates were likely to start rising in the new year. That effect has now calmed down significantly.
Also supporting a more positive assessment for respondents’ finances is coverage of the government’s recent speculation around possible tax cuts.
With the labour market remaining strong respondents are generally more confident about the domestic economy and there is likely to have been a ‘feelgood effect’ from the passing of marriage equality legislation.
Media coverage of tax cuts in the US combined with easing tensions in North Korea, may also be supporting an improved outlook for international conditions.
All five components of the Index improved in December. Responses on family finances support the assessment around interest rates and tax cuts although it is unlikely that respondents are experiencing any relief in terms of wage increases. The ‘finances vs a year ago’ sub-index posted the biggest gain, rising 5.6% to 89.6 – an 18 month high but still well below the 100 mark indicating more consumers are seeing their finances deteriorate than improve. The forward view continues to be more positive the ‘finances, next 12mths’ sub-index posted a further 1.8% rise to 107.3, the most positive reading in a little over two years.
Views on the economy also posted solid gains, the ‘economic conditions, next 12 months’ sub-index rose 5% and the ‘economic outlook over the next five years’ sub-index was up 3.4%.
The ‘time to buy a major household item’ sub-index rose 2.8% but at 122.1 remains well below the long run average of 127.5 and still pointing to subdued consumer spending plans for the Christmas period.
The December survey included additional questions on news recall that provide insight into the factors shaping sentiment. Overall, recall levels were again low suggesting consumers are getting less exposure to news in general. The highest recall rates were for news on ‘economic conditions’ (19%); ‘budget and taxation’ (19%); interest rates (19%); inflation (10%); jobs (10%); and international conditions (9%). News on all of these topics was viewed as more favourable than three months ago, with particularly big improvements around international conditions, the economy and interest rates.
Consumers continue to become more comfortable about the outlook for jobs. The Westpac Melbourne Institute Unemployment Expectations Index declined 2.4% to 127.6 in December, the index reaching its lowest level since May 2011 (recall that lower reads mean more consumers expect unemployment to fall in the year ahead). The index can be viewed as a measure of consumers’ sense of job security. Qld consumers showed a particularly big improvement
in December. Notably, all major states now have index reads below their long run averages, meaning consumer expectations for labour markets are marginally better than average.
The ‘time to buy a dwelling’ index rose 2.3% to 100.6, the first reading over 100 since the start of the year. The state detail continues to show materially weaker reads in NSW (90) and Vic (88) as affordability remains a constraint whereas there are much more positive assessments in Qld (121) and WA (122).
The Westpac Melbourne Institute Index of House Price Expectations edged 0.4% lower to 135. Price expectations continue show a sharp slide in NSW where the state index fell a further 12% in December to be down by 24% over the year. In contrast the Vic index was up 2% for the month and 10% for the year, with Qld and WA posting strong gains in the month (up 8% and 9% respectively). The variations mainly reflect the sharper slowdown in price growth evident in the Sydney market.
Responses to additional questions on the ‘wisest place for savings’ continue to indicate high levels of risk aversion. Nearly two thirds of consumers still favour safe options – deposits, superannuation or paying down debt – with only 12.8% nominating real estate and 8% nominating shares. About the same proportion of consumers favour ‘pay down debt’ (20.4%) as favour real estate and shares combined.
The Reserve Bank Board next meets on February 6. As discussed above, markets and general commentary have cooled their fervour for rate hikes in 2018. In turn that has helped boost Consumer Sentiment along with other factors discussed above.
However we doubt whether this welcome lift to confidence will be sufficient to see the Bank achieve its ambitious growth forecast in 2018 of 3.25%. Constraints around incomes; savings; and debt are still likely to keep consumer spending growth below trend.
The Bank’s forecasts for core inflation (1.75% in 2018) and the cooling in the Sydney property market (which is once again apparent in this survey) are also likely to be significant headwinds to higher interest rates.
We confirm our view that the cash rate is likely to remain on hold at 1.5% through 2018.“
Westpac, “Consumer Sentiment bounces back“, 13 Dec 2017 More
EU: Employment (National Accounts). Q3/2017
Press Release Extract [ser_eu_jobs]
The number of persons employed increased by 0.4% in the euro area (EA19) and by 0.3% in the EU28 in the third quarter of 2017 compared with the previous quarter, according to national accounts estimates published by Eurostat, the statistical office of the European Union. In the second quarter of 2017, employment increased by 0.4% in the euro area and by 0.5% in the EU28. These figures are seasonally adjusted.
Compared with the same quarter of the previous year, employment increased by 1.7% in the euro area and by 1.8% in the EU28 in the third quarter of 2017 (after +1.6% and +1.7% respectively in the second quarter of 2017).
Eurostat estimates that, in the third quarter of 2017, 236.3 million men and women were employed in the EU28, of which 156.3 million were in the euro area. These are the highest levels ever recorded in both areas.
These figures are seasonally adjusted. These quarterly data on employment provide a picture of labour input consistent with the output and income measure of national accounts.
Employment growth in Member States
Among Member States for which data are available for the third quarter of 2017, Estonia (+1.3%), Croatia and Malta (both +1.1%) as well as Bulgaria (+1.0%) recorded the highest increases compared with the previous quarter. In contrast, decreases were observed in Lithuania (-0.5%) and Poland (-0.3%), while employment remained stable in both Romania and the United Kingdom.”
Eurostat, “Third quarter of 2017 compared with the second quarter of 2017: Employment up by 0.4% in the euro area and by 0.3% in the EU28 +1.7% and +1.8% respectively compared with the third quarter of 2016“, 13 Dec 2017 More
EU: Industrial Production. Oct 2017
Press Release Extract [ser_eu_production]
In October 2017 compared with September 2017, seasonally adjusted industrial production rose by 0.2% in the euro area (EA19) and by 0.3% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In September 2017, the industrial production fell by 0.5% in both zones. In October 2017 compared with October 2016, industrial production increased by 3.7% in the euro area and by 4.2% in the EU28.
Monthly comparison by main industrial grouping and by Member State
The increase of 0.2% in industrial production in the euro area in October 2017, compared with September 2017, is due to production of non-durable consumer goods rising by 0.5% and energy by 0.1%, while production of intermediate goods remained stable, capital goods fell by 0.3% and durable consumer goods by 1.9%.
In the EU28, the increase of 0.3% is due to production of non-durable consumer goods rising by 0.7% and intermediate goods by 0.2%, while production of both energy and capital goods fell by 0.2% and durable consumer goods by 1.7%.
Among Member States for which data are available, the highest increases in industrial production were registered in Ireland (+10.6%), Denmark (+2.8%) and Croatia (+2.7%), and the largest decreases in Malta (-6.1%), Portugal (-2.3%) and the Netherlands (-1.8%).
Annual comparison by main industrial grouping and by Member State
The increase of 3.7% in industrial production in the euro area in October 2017, compared with October 2016, is due to production of non-durable consumer goods rising by 5.7%, intermediate goods by 5.0%, durable consumer goods by 3.7% and capital goods by 3.3%, while production of energy fell by 2.2%.
In the EU28, the increase of 4.2% is due to production of intermediate goods rising by 5.3%, non-durable consumer goods by 4.7%, capital goods by 4.2% and durable consumer goods by 3.5%, while production of energy fell by 0.3%.
Among Member States for which data are available, the highest increases in industrial production were registered in Ireland (+13.4%), Slovenia (+10.7%), Poland (+10.0%) and Romania (+9.1%). Decreases were observed in Denmark (-2.3%), Malta (-1.4%) and the Netherlands (-0.4%). ”
Eurostat, “Industrial Production. Oct 2017“, 13 Dec 2017 More
US: CPI. Nov 2017
Press Release Extract [ser_us_fomc]
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent.
The energy index rose 3.9 percent and accounted for about three-fourths of the all items increase. The gasoline index increased 7.3 percent, and the other energy component indexes also rose. The food index was unchanged in November, with the index for food at home declining slightly.
The index for all items less food and energy increased 0.1 percent in November. The shelter index continued to rise, and the indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November.
The all items index rose 2.2 percent for the 12 months ending November. The index for all items less food and energy rose 1.7 percent, a slight decline from the 1.8-percent increase for the period ending October. The energy index rose 9.4 percent over the last 12 months, and the food index rose 1.4 percent.
The food index remained unchanged in November. The index for food at home declined 0.1 percent, with four of the six major grocery store food group indexes falling. The index for nonalcoholic beverages, which was unchanged in October, fell 0.6 percent in November. The fruits and vegetables index declined 0.5 percent in November after being unchanged in October. The index for meats, poultry, fish, and eggs fell 0.3 percent, and the cereals and bakery products index declined 0.2 percent.
The index for other food at home rose in November, increasing 0.4 percent. The index for dairy and related products, which declined 0.3 percent in October, increased 0.3 percent in November. The index for food away from home also increased in November, rising 0.2 percent.
The food at home index increased 0.6 percent over the last 12 months. The index for meat, poultry, fish, and eggs rose 1.4 percent over the span, the largest increase among the six groups. The indexes for dairy and related products and for nonalcoholic beverages were unchanged over the last 12 months, and the index for cereals and bakery products declined 0.8 percent. The index for food away from home rose 2.4 percent over the last 12 months.
The energy index rose 3.9 percent in November after falling 1.0 percent the prior month. The gasoline index rose 7.3 percent in November after declining in October. (Before seasonal adjustment, gasoline prices rose 2.6 percent in November.) The other major energy component indexes also increased, with the electricity index increasing 0.5 percent and the index for natural gas rising 0.6 percent.
The energy index increased 9.4 percent over the past 12 months, with all of the major component indexes rising over the span. The fuel oil index rose 18.6 percent and the gasoline index increased 16.5 percent. The index for natural gas advanced 3.6 percent, and the electricity index rose 2.5 percent.
All items less food and energy
The index for all items less food and energy increased 0.1 percent in November after rising 0.2 percent in October. The shelter index rose 0.2 percent, with the rent index increasing 0.3 percent and the index for owners’ equivalent rent rising 0.2 percent. The index for lodging away from home fell 1.3 percent in November after rising in each of the three prior months.
The index for used cars and trucks increased 1.0 percent in November, and the index for motor vehicle insurance rose 0.8 percent. The index for new vehicles, which declined in September and October, rose 0.3 percent in November. The indexes for wireless phones services, alcoholic beverages, and tobacco also increased in November.
The index for medical care was unchanged in November, with the index for prescription drugs increasing 0.6 percent and the hospital services index rising 0.1 percent, but the physicians’ services index declining 0.8 percent. The indexes for recreation and for personal care were also both unchanged in November.
The apparel index fell in November; its 1.3-percent decline was its largest decrease since September 1998. The index for airline fares fell 2.4 percent in November after rising the prior month. The index for household furnishings and operations also declined, falling 0.1 percent.
The index for all items less food and energy increased 1.7 percent over the last 12 months. The 12- month change in the shelter index remained at 3.2 percent, and the index for motor vehicle insurance rose 8.0 percent over the span. The indexes for used cars and trucks, apparel, new vehicles, and airline fares all declined over the past year.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.2 percent over the last 12 months to an index level of 246.669 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.3 percent over the last 12 months to an index level of 240.666 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.1 percent over the last 12 months. For the month, the index was unchanged on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.”
Bureau of Labor Statistics, “Consumer Price Index. Nov 2017“, 13 Dec 2017 (08:30) More
US: Mortgage Applications Fall 2.3 Percent
Press Release Extract [ser_us_mba]
Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 8, 2017.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 10 percent higher than the same week one year ago.
The refinance share of mortgage activity increased to 52.4 percent of total applications, its highest level since January 2017, from 51.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent of total applications.
The FHA share of total applications increased to 11.8 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.3 percent from 10.7 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.20 percent from 4.19 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.11 percent from 4.16 percent, with points unchanged at 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since April 2017, 4.13 percent, from 4.11 percent, with points decreasing to 0.39 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since March 2017, 3.61 percent, from 3.59 percent, with points decreasing to 0.44 from 0.48 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs decreased to 3.42 percent from 3.48 percent, with points increasing to 0.48 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.”
Mortgage Bankers Association (MBA), “ Weekly Mortgage Applications Survey: Mortgage Applications Decrease in Week Ending 8 Dec 2017“, 13 Dec 2017 More
US Federal Budget Surplus
Summary of Receipts, Outlays, and the Deficit/Surplus of the U.S. Government, Fiscal Years 2017 and 2018
Period (Month) Receipts ($m) Outlays ($m) Surplus/Deficit Fiscal Year 2016-2017 Oct 2016 221,692 267,523 -45,831 Nov 2016 199,875 336,544 -136,669 Dec 2016 319,204 346,541 -27,337 Jan 2017 344,069 292,812 +51,257 Feb 2017 171,713 363,757 -192,044 Mar 2017 216,584 392,816 -176,233 Apr 2017 455,605 273,177 +182,428 May 2017 240,418 328,841 -88,423 Jun 2017 338,660 428,894 -90,233 Jul 2017 232,040 274,980 -42,939 Aug 2017 226,311 334,000 -107,689 Sep 2017 348,722 340,688 +8,034 Fiscal Year 2017 3,314,894 3,980,571 -665,677 Fiscal Year 2017-2018 Oct 2017 235,341 298,555 -63,214 Nov 2017 208,374 346,922 -138,547 Fiscal YTD 2018 443,715 645,476 -201,761
Department of the Treasury, Bureau of the Fiscal Service, “Monthly Treasury Statement of Receipts and Outlays of the United States Government For Fiscal Year 2018 Through November 30, 2017, and Other Periods“, 13 Dec 2017 More
US: FOMC Monetary Policy
Press Release Extract [ser_us_fomc]
Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Hurricane-related disruptions and rebuilding have affected economic activity, employment, and inflation in recent months but have not materially altered the outlook for the national economy. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1¼ to 1½ percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”
US: Congress Tax Compromise
Press Report [Reuters]
“Congressional Republicans have reached a deal on final tax legislation, the U.S. Senate’s top Republican tax writer said on Wednesday, with President Donald Trump saying he would back a sharply lowered corporate tax rate of 21 percent.
The 21 percent rate would be slightly above a proposed 20-percent rate that Trump supported earlier, but still far below the present headline rate of 35 percent, a deep tax cut that U.S. corporations have been seeking for years.
As they finalized the biggest tax overhaul in 30 years, Republicans for weeks wavered on slashing the top income tax rate for the rich, but finally agreed to do it, despite Democrats’ criticism that the bill favors the wealthy and corporations, while offering little to the middle class.
The emerging congressional agreement includes a 21-percent corporate rate; a top individual income tax rate of 37 percent, down from the current 39.6 percent level; and a $10,000 cap on deducting state and local property or income tax payments, said sources familiar with the negotiations.
Although the president said a “final number” on the corporate rate had not been set, the Senate and House of Representatives were hurtling toward an agreement that would clear the way for final votes in both chambers next week.
“I think we’ve got a pretty good deal,” Senate Finance Committee Chairman Orrin Hatch told reporters as he prepared to join other Republicans for lunch with Trump.
Hatch’s remarks appeared to reinforce expectations that a final vote could begin in the Senate as early as Monday. Further details of the agreed legislation were not yet available.
Republicans have been urgently trying to finalize details of their bill without increasing its estimated impact on the federal deficit. As drafted, it is expected to add as much as $1.5 trillion to the $20-trillion national debt over 10 years.” Reuters
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