Biden budget forecasts 10-year deficit of $14.531 trillion

Highlights of the White House budget plan

Highlights of the White House budget plan
Note that all these plans need to get through Congress, which means that they’ll be fundamentally different.
  • FY 2021 deficit forecast at $3.669T
  • 2022 at -$1.837T
  • 2023 at -$1.372T
  • Calls for 16.5% increase in revenue over 2021 (those are taxes)
  • Sees public debt at 117% of GDP by 2031
  • Sees 5.2% GDP growth this year, 4.3% in 2022, 2.2% in 2023
  • Sees CPI at 2.1% in 2021, 2.1% in 2022 and 2.2% in 2023
  • Sees US jobless rate averaging 5.5% in 2021 vs 4.1% in 2022 and 3.8% in 2023
Those GDP forecasts are for the fiscal year so they look different than private economists’ numbers. In any case, those look to be conservative to me.
All the pertinent details from this budget leaked in the past couple days.

European shares close the week with gains

Major indices higher for the week/higher for the month

The major European indices have moved higher on the day and the week. With most European it’s open on Monday, there is still one more day of trading for the month. However, the major indices are all trading higher for the month as well.

A look at the provisional closes are showing:
  • German DAX, +0.7%
  • France’s CAC, +0.8%
  • UK’s FTSE 100, +0.2%
  • Spain’s Ibex +0.45%
  • Italy’s FTSE MIB, +0.45%
For the week,
  • German DAX, +0.97%
  • Francis CAC, +1.55%
  • UK’s FTSE 100, +0.1%
  • Spain’s Ibex, +0.3%
  • Italy’s FTSE MIB, +0.8%
For the month:
  • German DAX, +2.5%
  • France’s CAC, +3.4%
  • UK’s FTSE 100, +0.8%
  • Spain’s Ibex, +4.7%
  • Italy’s FTSE MIB, +4.3%
in other markets as London/European traders look to exit:
  • Spot gold is trading near unchanged at $1896.20
  • .Spot silver is also near unchanged at $27.83.
  • WTI crude oil futures are trading up six cents or 0.09% at $66.92
  • Bitcoin is down $1700 or -4.37% at $36,810

Germany reports 7,380 new coronavirus cases, 192 deaths in latest update today

Total active cases fall further to ~120,000, the lowest since early March

Meanwhile, the 7-day incidence rate also declines further to 39.8 so that indicates that the spread of the virus is also continuing to fall at a modest pace. This should translate further into the daily figures above down the road.
For now, it looks like the daily case count should at least keep below 10,000 on average and that should see daily deaths also fall eventually.
In terms of medical capacity, there were 2,836 (-166) virus patients requiring intensive care as of yesterday with there being 3,327 (14%) intensive care beds still available.



PBOC sets USD/ CNY mid-point today at 6.3858 (vs. yesterday at 6.4030)

The People’s Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

    • USD/CNY is permitted to trade plus or minus 2% from this daily reference rate.
    • CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.


  • The previous close was 6.3840
  • Reuters estimate from their survey was 6.3790, Bloomberg 6.3837 …. (A rate that’s significantly stronger or weaker than expected is typically considered a signal from the PBOC).

On the economic calendar in the US on Friday 28 May 2021 … a big one for CPI! Preview.

The folks calling US inflation only transitory are going to have to fight off those disagreeing today if the consensus call for the data is correct.

There is a good amount of data due from the US, amongst it is the PCE price index
  • due at 8.30 am US ET
  • which is 1230 GMT
Reuters polling have expectations at 0.6% m/m and … drum roll please …. 2.9% y/y
As background to this, the US Federal Reserve uses the PCE (personal consumption expenditures price index) as its preferred inflation measure. The Fed’s target is 2%.
Dallas Fed head Kaplan has been calling for a tapering discussion for months now, Vice Chair Clarida seems to be getting on board (for a discussion). Kaplan may get some vindication today.
 The folks calling US inflation only transitory are going to have to fight off those disagreeing today if the consensus call for the data is correct.

Major indices close with modest changes on the day

Dow and S&P up for the second straight day.

The major indices are closing with modest changes on the day. The Dow is leading the way with a gain of 0.4%.

  • The Dow and S&P are up for the second straight day
  • The NASDAQ remains on track for its 1st monthly loss since October
  • Dow and S&P are both on track for monthly gains
  • S&P is 1% from its all-time high
  • Russell 2000 the way for the second consecutive day
A look at the final numbers shows:
  • S&P index up 4.76 points or 0.11% at 4200.79
  • NASDAQ down 1.72 points or -0.01% at 13736.28
  • Dow up 141.59 points or less 0.41% at 34464.64.
Salesforce after the close announced better earnings and revenues. The stock is up 1.6% in after-hours trading.
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