Donald Trump’s incredible tour of the Middle East ended with a calm volume of domestic reality as the president returned home to a downgrade of credit ratings, pessimistic data on consumer sentiment, and challenges to his flagship tax bill.
Over the past two weeks, Trump has seen his approval rating improve and bouncing hard after the stock market suspended some of the more aggressive import duties it announced in early April. Labor markets and inflation data are also encouraging, alleviating fears that a sharp slowdown or even a recession could be imminent.
However, while the president was on his way from Abu Dhabi to Washington, Moody’s stripped the US of its highest triple-A credit rating on concerns about rising levels of government debt.
“We are pleased to announce that we are committed to providing a range of services and services to helping people with a range of services,” said Michael Peterson, CEO of the Peter G Peterson Foundation.
“It’s unacceptable that a great country like America will harm its own credit rating.”
Earlier that day, a closely watched survey of University of Michigan’s consumer sentiment showed confidence fell to the second-lowest level on record as people’s expectations of inflation surged.
And soon after, Trump suffered a setback on Capitol Hill when conservative hardliners on the U.S. House Budget Committee voted against his biggest domestic legislative goal.
Tricky Politics is a com-winning window from multi-billion dollar economic partnership agreements and investment transactions signed this week during a presidential tour of Saudi Arabia, Qatar and the United Arab Emirates.
With its business leader Phallanx led by Elon Musk and top ministers, including U.S. Treasury Secretary Scott Bescent and Commerce Secretary Howard Lutnick, President Trump saw the favorable agreement as a vote of confidence in the American economy.
“It’s a new industrial revolution, driven by Donald Trump, and it’s going to be a great job for Americans,” Lutnick told Fox News in an interview with the UAE.
Back in Washington, Trump has passed what he calls the “big beautiful bill” to help ease the hit to households and businesses from the president’s new tariffs, restoring confidence in managing the economy.
The fate of the tax bill is on the central stage in Washington as Trump and Republican leaders in the lower Congress have gathered a small majority of them to approve the law.
But there was a major setback in that progress on Friday when the House Budget Committee failed to move forward.
“If we continue to get checked, if we receive a subsidy where illegals get checks, then we get the checks, and the illegals get checks, and the businesses that shouldn’t get them,” said Ralph Norman, a Republican from South Carolina, who was one of the groups that opposed the bill.
Shortly after the vote, Trump posted to X: “Republicans must unite behind ‘One, a big beautiful bill!” “The Republican Party doesn’t need a ‘Grand Stander’. Stop talking and get it done! ”
Meanwhile, moderate Republicans in battlefield districts advocate for more generous tax credits on state and local tax payments.
Even if the deadlock breaks down on Capitol Hill, the fiscal Hawks warn that the impact on the US finances could be intrusive.
A bipartisan group, the responsible federal budget committee, warned on Friday that the law would add 3.3 tons to U.S. debt over a decade, taking the risk that it siphoned bond investors in a way similar to the 2022 UK budget crisis.
“The current fiscal situation in the US is worse than that in the UK, and the impact on the deficit of the package currently being considered is even greater than that in the truss package. The market may not be very kind to this,” CRFB said in a post.
Friday’s consumer sentiment data did not reflect the impact of Switzerland’s US-China contracts at the beginning of the week.
But Walmart, the world’s largest retailer, warned this week that stores need to raise prices despite US-China detente, economists said consumer sentiment is an additional indication that there is high anxiety over Trump’s trade policy.
This week’s average RealClearPolitics poll found 50.1% of Americans disapproved of Trump’s performance as president, while 46.1% approved it.
Recommended
The 4-percent point deficit is narrower than the 7.1-point approval deficit he had at the end of April, but a major drop from the 6-percent point advantage he posted at the start of his second term in January.
“Fear of the inflation impact of tariffs remained the biggest source of pessimism for consumers. Even if recent tariffs led to a substantial recovery in the stock market, it was the biggest source of pessimism for consumers,” Oxford Economics wrote Friday.
“Consumers are also more concerned about their finances and are hoping to undermine income growth.”
Additional Reports by George Steer
