Banks say it is good for the US economy

The “great and beautiful bill” of the president of the United States, or officially, the only Big Beautiful Bill (Obbba), is a controversial legislation, but some banks are in favor, saying that it is the take in the arm that the economy needs.

Was advanced in a Strait 51-49 vote In the United States Senate on Saturday night, bringing the great expenditure measure closer to the president’s desk.

The bill, which is characterized by radical fiscal reforms and specific incentives and is forecast to add to the federal deficithas caused warnings of credit agencies and Drawed Criticism.

But some banks say they think that the bill could boost the US economy.

In a letter published on Sunday, the American Banqueros Association “Firmly supports” many provisions within the bill for the “very necessary fiscal relief” they offer.

“I think that OBBB would almost undoubtedly be good for the economy of the United States in the next two years compared to the approval of anything,” said David Seif, the main economist of Nomura for developed markets, given that taxes will increase substantially next year after the expiration of many provisions under the Trump Tax Law of 2017.

The Tax Cuts and Jobs Law, approved in 2017, includes lower income tax fees, higher fiscal credits of children and generous deductions for companies. Without the action of Congress, many provisions under the law will expire at the end of 2025, a turn, analysts said they could reduce household consumption and corporate investment. The short -term attraction of the “great beautiful bill” lies in its ability to avoid acute fiscal contraction in 2026, they said.

“The most important thing that OBBB does during the next few years is to renew most of the tax provisions that expire, preventing an important and sudden tax contraction from happening,” Seif told CNBC. “OBBB provisions that allow a faster commercial expense of capital investments can increase investment in the next two years, although probably at the expense of investment in subsequent years,” he added.

Citi’s strategists, in the same way, said in a note published last Wednesday the approval of the bill will be an economic tail wind. “In the short term, commercial agreements (United Kingdom, China, eventually Japan, India, Europe, etc.) and the approval of the great bill (net stimulation) in July should improve the feeling of growth,” they wrote.

Citi also expects the Federal Reserve to loosen its monetary policy, reinforcing the feeling of growth, and said that “we do not see a moment of bond surveillance for 2025/2026, since the BBB delta is largely financed by tariff income.”

Debt load is a central concern for many critics. The non -partisan Congress Budget office projects the BBB will add at least $ 3 billion to the federal deficit during the next decade.

Although Morgan Stanley scored at the beginning of June That the tax provisions in favor of the growth of the bill can benefit companies and individuals, as well as key capital sectors, such as communication, industrial and energy services, he said that he could generate concerns about fiscal sustainability.

Similarly, Erica York, vice president of Federal Fiscal Policy at the Federal Federal Tax Policy Center, “is fiscally irresponsible, significantly increasing budgetary deficits and debt, even when it takes into account growth.”

York said that many of the tax cuts are complicated and poorly designed, giving tax cuts to certain types of workers and leaving others out.

In addition to that, due to the bill, which includes many limited fiscal rules, the internal tax service must spend more time and resources updating forms, orientation and execution tools, which adds to the administrative burden of an already stretched agency, York said.