If the Trump administration’s tariff policy has demonstrated anything, it is this: the US economy can withstand higher taxes on corporate America without collapsing. That lesson is increasingly relevant as federal deficits widen and government debt climbs to record levels. Tariffs Raised Billions — Growth Held Up Tariffs operate like taxes. Importers pay them, then either absorb the cost or pass it on to consumers. In the second half of 2025, tariffs generated US$29.5 billion per month in additional revenue for the US Treasury. Yet...
BOT’s Unexpected Move Spurs Market Rally
- The Bank of Thailand (BOT) cut its interest rate by 0.25 percentage points, surprising economists.
- The move aims to support economic growth and weaken the baht to boost exports.
- 16 out of 26 economists in a Reuters poll had expected no change in policy.
Market Reactions
- Thai stocks jumped 2%, rebounding after two consecutive sessions of losses.
- The baht remained flat, despite expectations of further rate cuts later this year.
- Other Asian markets gained:
- Philippines (+1.3%)
- Malaysia (+1.2%)
- China (+1%)
Regional Currency Movements
- Singapore dollar, Malaysian ringgit, and Indonesian rupiah fell 0.2%.
- Taiwan dollar traded flat after Taiwan revised down its 2025 GDP forecast to 3.14% from 3.29%.
- US dollar index gained 0.3%, recovering from an 11-week low.
Outlook & Future Risks
- Analysts expect one or two more rate cuts if the US imposes tariffs on Thailand or if global growth slows.
- BOT joins South Korea in easing rates, while Indonesia and the Philippines kept theirs unchanged.
- The Trump administration’s semiconductor restrictions on China remain a key global economic factor.
Summary:
- BOT unexpectedly cut interest rates by 0.25%, boosting Thai stocks by 2%.
- The baht remained stable, while regional currencies saw slight losses.
- Further rate cuts are possible, depending on global risks.
- Markets in China, the Philippines, and Malaysia also posted gains.
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