A prelude to trillions of dollars of monetary easing? The "Big and Beautiful" bill passed the procedural vote, and Goldman Sachs advanced its forecast of the Fed's rate cut to September

By: Bright, Foresight News

On July 1, the U.S. Senate obtained enough votes in a procedural vote (51 in favor and 49 against) to advance the Trump administration's "One Big Beautiful Bill Act", which had previously angered Musk, who had a falling out with Trump.

Musk directly tweeted that "If this crazy spending bill (the "Big and Beautiful" bill) passes, a new American political party will be formed the next day. Our country needs an alternative to the Democratic and Republican parties so that the people can truly have a say." Since then, Musk has retweeted posts criticizing the United States' heavy debt, and commented on the fact that the debt has risen during the Democratic and Republican administrations, "They just pretend to be two parties, but in fact they are just one party."

In this regard, a previous online poll showed that more than 80% of voters believed that the United States needs a new political party.

In the early morning of July 1, Beijing time, the U.S. Senate received enough votes (51 in favor and 49 against) in a procedural vote to advance Trump's tax reform bill, increasing the possibility of the bill being passed in the next few days. The bill is called the "One Big Beautiful Bill Act", or OBBB Act for short, which contains multiple clauses and more than 1,000 pages, focusing mainly on tax cuts and spending cuts.

The bill will extend the corporate and individual tax cuts passed by Trump in 2017 during his first term as president, provide new tax breaks for tips, car loans, etc., raise the eligibility threshold for social welfare for poor groups, and significantly cut clean energy subsidies in the Biden administration's Inflation Reduction Act (IRA), while increasing defense spending and providing more funds to combat illegal immigration.

Can the "Big and Beautiful" Act Make Crypto "Big and Beautiful"?

Aside from the dispute over the debt ceiling, Republican Senator Cynthia Lummis of Wyoming is trying to sneak a major cryptocurrency tax measure into the massive budget bill on Trump's agenda, aimed at reducing the tax burden arising from basic cryptocurrency activities. Lummis proposed on Monday to include relevant provisions in the "Big Beautiful Bill" in Congress, including tax exemptions for small crypto transactions (less than $300).

In the industry's view, this will rationalize the current practice of taxing core cryptocurrency activities - staking and digital asset mining - at both the beginning and end of the activity.

The proposal also proposes to set the annual small transaction total limit at $5,000, which will significantly reduce the burden of calculating capital gains tax for those who only trade a small amount of digital assets. Currently, the amendment promoted by Cynthia Lummis has not yet been voted on, and also involves tax issues such as cryptocurrency lending, wash sales and charitable donations.

The industry believes that the amendment will eliminate the concerns of many potential users about trying cryptocurrencies. In fact, just yesterday, the U.S. Supreme Court rejected Coinbase user James Harper's appeal against the Internal Revenue Service (IRS), refusing to hear his request to "protect user encryption transaction data from being forced to disclose."

However, once the amendment is passed, investors' small transactions will be exempt from some of the cumbersome procedures of tax reporting, and daily transaction data that does not involve large-scale token purchases and sales will not have to be disclosed.

In addition, Jeff Merkley, a Democratic senator from Oregon, proposed an amendment to the "Big and Beautiful" bill, prohibiting elected officials from promoting or profiting from cryptocurrency tokens in which they have a financial interest. In response, Cynthia Lummis righteously opposed the amendment, saying it would seriously damage the innovation and competitiveness of the United States and the government's ability to effectively understand and regulate digital assets. It can be seen that cryptocurrency has now become the basic source of the Republican Party's economy.

Overall, the "Big and Beautiful" bill is seen by the market as the first step of the Trump administration's "flooding", and Trump once again urged Powell to cut interest rates. In response, Goldman Sachs moved up its forecast for the Fed's interest rate cut from December this year to September. Perhaps, a big flood of money is coming?