Institution: The "Big and Beautiful" Act has limited actual impact on the U.S. economy

ChainCatcher news, although the U.S. government calls its fiscal plan "a grand and beautiful bill," Lombard Odier finds it hard to see any reasons for optimism. The institution believes that this budget proposal has almost no uplifting effect on the macroeconomic level and may further worsen the fiscal outlook. Strategic analyst Filippo Pallotti pointed out that the bill is expected to expand the federal deficit by about $4 trillion over the next decade; if the tax cuts are made permanent, the deficit could be even larger.

While tariff revenues can alleviate fiscal pressure to some extent, the ratio of public debt to GDP is still expected to rise to 119% around 2034. Most tax cuts are unlikely to significantly boost consumption, and the largest spending cuts will focus on Medicare and food assistance. Given the limited actual impact of this budget proposal on economic growth, Lombard Odier maintains its previous forecast for U.S. economic growth: 1.3% in 2025 and 1.4% in 2026.