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UBS On-Air: Market Moves

UBS On-Air: Paul Donovan Daily Audio 'Fiscal inefficiency'

24 Mar 2025

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Media reports suggest that the rather haphazard attempts to restructure the US government could cost half a trillion dollars in lost tax revenues this year. Investors have not priced the restructuring as an efficiency improvement (more efficient government would boost both bonds and equities). While record wealth levels in the US suggest that the high fiscal deficit can be funded, losing tax revenue on this scale will raise concerns about sustainability at some point.

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