Last Saturday evening (June 28), the "Big and Beautiful" spending bill, strongly promoted by U.S. President Trump, successfully passed a key procedural hurdle in the Senate, clearing an important obstacle for the implementation of this massive budget plan.

This vote primarily determined whether to enter the final debate phase on the bill, with the result narrowly passing with 51 votes in favor and 49 against. All Democratic senators voted against it, and there were also divisions within the Republican Party, with Republican senators Thom Tillis from North Carolina and Rand Paul from Kentucky joining the opposition.

The voting lasted for several hours, during which the situation was tense and a deadlock was only broken in the final stages. Senators Mike Lee from Utah, Rick Scott from Florida, and Cynthia Lummus from Wyoming, who had previously been undecided, ultimately voted in favor at a critical moment, becoming key players in pushing the bill forward.

More dramatically, Wisconsin Senator Ron Johnson, who had long criticized the bill, changed his stance at the last moment, switching his vote from "no" to "yes." This vote was crucial in allowing the bill to surpass the simple majority threshold, meaning Vice President JD Vance did not need to cast an additional vote to break a tie.

After the voting results were announced, Trump quickly celebrated on his self-created social media platform, Truth Social, emphasizing in all capital letters that he was "incredibly proud of the Republicans tonight."

The "Big and Beautiful Bill" is a nickname for a massive legislative agenda proposed by Trump during his latest campaign. Essentially, it is a comprehensive fiscal and tax bill, over 900 pages long, aimed at bundling multiple tax cuts, increased spending, and structural reforms into one package, hoping to stimulate economic growth through large-scale tax cuts, with the expectation that future growth will "make up" for the deficits caused by the tax cuts.

Core objectives:

Continuing and expanding tax cuts:

• Making permanent the major tax cuts from the 2017 Trump administration's "Tax Cuts and Jobs Act."
• Exempting tips, overtime pay, and certain auto loans from taxes.
• Increasing the child tax credit and enhancing tax deductions for seniors.

Increasing government spending in specific areas:

• Boosting the defense budget, particularly for border security funding.
• Providing support for certain infrastructure and industries.

Partially offsetting the fiscal gap caused by tax cuts:

• Planning to offset some spending by cutting social welfare programs like Medicaid and food assistance.

Main points of contention:

Deficit and debt risks:

Independent analysis and the Congressional Budget Office (CBO) estimate that this bill could add at least $3 to $5 trillion to the federal deficit over the next decade.

The current U.S. national debt exceeds $36 trillion, and continuing large-scale tax cuts without matching sustainable fiscal balance has been criticized as a risk to national credit and monetary stability.

Internal conflicts:

There are significant divisions within the Republican Party on how to "save money."

Conservatives demand more radical cuts to welfare, while moderates (especially those from high-tax states) call for easing state and local tax (SALT) deduction limits to alleviate the burden on the middle class.

Trump has urged conservatives on social media not to be "too crazy," emphasizing the need for votes and re-election.

Issues of distributive justice:

Democrats criticize the bill for primarily benefiting the wealthy and corporations, with limited tax benefits for ordinary people, who may suffer from welfare cuts.

Potential impacts:

If the "Big and Beautiful Bill" pushed by Trump is passed, it would serve as an "economic stimulant" in the short term. Tax cuts could increase the money in the hands of businesses and consumers, promoting consumption and investment, and helping to create jobs, which seems quite appealing. However, the scale of the tax cuts in this bill is substantial, and the accompanying spending cuts are limited, which will inevitably lead to a significant increase in the U.S. fiscal deficit. Once the deficit rises, the government will need to borrow more money, national debt will soar, and investor confidence in U.S. Treasury bonds may be affected, potentially exacerbating concerns about the depreciation of the dollar and inflation.

In the long term, if the economy cannot grow enough to fill these new debt gaps, the government may have to raise taxes or cut welfare, increasing political conflicts and pressures.

For global markets, this fiscal risk may lead investors to favor "hard assets" like gold and Bitcoin for hedging, potentially changing the flow of funds. Additionally, if the Federal Reserve's policies are not aligned with fiscal policies, interest rates and capital markets may also be impacted.

The recently passed "Big and Beautiful Bill" in the Senate has left investors questioning the U.S. fiscal outlook, but the current market focus is not limited to this; everyone is also watching the non-farm payroll data set to be released this Thursday. The expansion of the deficit combined with employment performance will directly influence the Federal Reserve's policy direction and will also affect the future trends of risk assets and the cryptocurrency market.

Currently, the market generally expects 110,000 new jobs to be added in June, down from the previous value of 139,000, with the unemployment rate expected to rise from 4.2% to 4.3%. This data will be a key focus for the Federal Reserve, especially under the influence of multiple factors such as tariffs and artificial intelligence, as there remains uncertainty about whether the unemployment rate will rise further.

If new job additions fall below 100,000, gold prices may rise, while the stock market and the dollar could come under pressure, with funds potentially flowing into cryptocurrencies like Bitcoin to hedge against economic slowdown risks; conversely, if new jobs exceed 150,000, the stock market and the dollar will be boosted, market risk appetite may recover, potentially putting short-term pressure on gold and cryptocurrencies due to decreased demand for safe-haven assets.

Additionally, the labor force participation rate and employment-population ratio have recently declined, becoming key indicators of market attention. If the unemployment rate remains low but labor force participation decreases, it indicates potential weakness in the labor market, raising concerns about the economic outlook. Typically, a strong employment situation can attract more workers back to the job market, which will also be a focus for future observation.

Typical impacts of non-farm data on the cryptocurrency market in 2025:

January 2025 Non-farm:

• Data exceeded expectations (strong job additions).
• The dollar strengthened, U.S. Treasury yields rose, and risk assets came under pressure.
• Bitcoin briefly fell but quickly rebounded due to market optimism about manageable inflation in a strong economy.

March 2025 Non-farm:

• Data slightly below expectations, initial signs of a slowing job market.
• Expectations for the Federal Reserve to cut interest rates this year increased, with gold and Bitcoin rising in tandem.
• Bitcoin rose over 3%, with funds viewing it as a hedge against potential recession and monetary easing.

April 2025 Non-farm (unexpectedly weak):

• Significantly below expectations, with a slight rise in the unemployment rate.
• The dollar weakened, gold prices surged, and Bitcoin briefly broke through a key level, rising over 5% on the day. The market bet on the Federal Reserve potentially cutting rates early, shifting liquidity towards high-risk assets and the cryptocurrency market.

May 2025 Non-farm (steady data):

• Close to expectations, with stable employment.
• Market reaction was muted, the dollar remained stable, and U.S. Treasury yields fluctuated little.
• Bitcoin's performance was largely influenced by macro sentiment, with more volatility following technical trends and ETF inflows.

Before the non-farm data is released on Thursday, the final values for the June S&P PMI, ISM Manufacturing PMI, and May JOLTS job openings will also provide important forward guidance for the non-farm employment report. Additionally, Wednesday's June ADP small non-farm data, Thursday's ISM Non-Manufacturing PMI, trade balance, factory orders, and initial jobless claims will provide further evidence for the market's assessment of U.S. employment and economic trends.

Related: After a record-breaking second quarter, how will the monthly close look? This week, the five key points for Bitcoin (BTC).

Original article: “Trump's Big Spending Bill Clears Senate, U.S. Fiscal Deficit and Non-Farm Data Double Test Markets”

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