Key takeaways

• On 3 July 2025, the US Congress passed the landmark One Big Beautiful Bill Act (H.R.1), a sweeping package that brings significant tax changes, new border security funding, major spending cuts, and broad policy shifts across Energy, Healthcare and more. This historic legislation reflects the current administration’s policy priorities and is already reshaping expectations for households, businesses and markets.
• While the bill increases the deficit and could cause some bond market nervousness, we think bond valutions adequately compensate for this risk. The rising deficit could also weigh on the USD but this should be limited if the tax cuts help economic growth.
• We maintain our overweight US equity positioning. This is mostly because earnings remain strong even as economic growth slows somewhat. However, the US government’s policy shifts remain a source of volatility as trade negotiations are ongoing. Tariffs are the first leg of President Trump's "three-legged" policy agenda. The second leg, which has now been concluded, includes extending the debt ceiling, cutting personal and corporate taxes, and providing fiscal stimulus. The third leg focuses on deregulation, targeting the Financial, Healthcare, Technology and Energy sectors, which could be another positive for stocks. Regardless, implementation risks remain, so we continue to focus on building resilient portfolios through diversification and a focus on quality assets.

Please refer to the full report for details about the event and our investment view.

https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/big-beautiful-bill-more-fiscal-policy-clarity-but-still-waiting-results-from-tariff-agreements/