The U.S. House of Representatives on Wednesday passed a sweeping tax and spending bill by a narrow margin, sending it to President Donald Trump for final approval. Dubbed the “Big Beautiful Bill” by the White House, the legislation includes a broad package of tax cuts, new deductions for families and seniors, and the elimination of taxes on tips and overtime pay. President Trump is scheduled to sign the bill into law on July 4th at 5 PM ET, marking a major policy victory for his administration. The bill passed the House by a vote of 218 to 214, with only two Republican defections, after having already cleared the Senate. Treasury Secretary Scott Bessent hailed it as historic legislation for American workers and families, arguing it would boost economic growth and stave off what he described as the largest potential tax hike in history. Speaker Mike Johnson echoed this sentiment, highlighting provisions that cut taxes, secure the border, promote energy dominance, and cut spending more deeply than any bill in recent history.
Alongside the tax cuts, the legislation includes spending measures intended to support manufacturing and bolster national security. It also increases scrutiny on federal programs to root out fraud and waste. The bill’s passage comes just ahead of the July 9 deadline for the expiration of a 90-day pause on Trump’s “Liberation Day” tariffs, first imposed in April. Analysts at UBS note that the White House is preparing to announce country-specific trade agreements and extend tariff delays for some nations. However, the Trump administration is expected to maintain its aggressive tariff strategy, particularly in sector-specific areas such as pharmaceuticals, semiconductors, copper, and aircraft, where new 25% levies are anticipated in the third quarter. Countries unable to reach trade agreements with Washington may face the full force of these tariffs. In a notable development, Trump announced a deal with Vietnam on Wednesday that will set a 20% tariff on incoming Vietnamese goods lower than the earlier April rate but still substantial. The deal also includes a 40% levy on transshipped goods, targeting countries like China that may use Vietnam as a backdoor into the U.S. market.
On the economic front, the U.S. labor market showed resilience with 147,000 jobs added in June, beating expectations and slightly above May’s upwardly revised 144,000. The unemployment rate ticked down to 4.1%, lending support to the Federal Reserve’s cautious stance. However, annual wage growth slowed to 3.7%, below expectations and a signal that inflationary pressures may be easing. This, combined with worries about the long-term fiscal impact of the new tax bill estimated to add $3.4 trillion to the national debt over the next decade held back stronger momentum for the U.S. dollar. The USD/JPY pair saw modest gains after the labor data, but upward momentum was limited as investors digested both fiscal risks and mixed inflation signals.
Meanwhile, the Japanese Yen strengthened on Friday following a surprising 4.7% year-over-year increase in household spending in May, reviving expectations of further interest rate hikes from the Bank of Japan. This stood in contrast to the U.S., where the market increasingly believes the Fed will resume cutting rates in September, possibly reducing them by up to 50 basis points before the year ends. This divergence contributed to a modest slide in the USD/JPY pair, although trade-related uncertainty kept traders cautious. Master the markets with expert-led trading courses at MJFXM — your path to financial freedom starts here.
In commodities, oil prices edged slightly lower in Asian trade on Friday, with Brent at $68.66 and WTI at $65.51 per barrel. Despite weekly gains of 1% to 2%, both benchmarks remain under pressure after steep losses the prior week. Strong U.S. payroll data firmed the dollar, limiting oil’s upside, while market attention turned to the upcoming OPEC+ meeting. The group is expected to announce another output increase of 411,000 barrels per day in August, continuing its gradual reversal of two years of deep cuts. The production hikes come in response to U.S. pressure to lower energy prices and reflect reduced geopolitical risk following a deescalation of hostilities between Iran and Israel. OPEC+, led by Saudi Arabia, is also reportedly planning to crack down on member states that exceed output limits.
Taken together, the developments signal an intensifying blend of domestic fiscal expansion, aggressive trade posture, and global economic recalibration, with Washington attempting to balance inflation, economic growth, and international competitiveness ahead of the upcoming presidential election season.