The Big Beautiful Law Is Bad News for US Bonds and Elon Musk

Yanko Hristov, Head of Institutional Sales and Business Development at Alaric Securities, on “Business Start”

The “Big Beautiful Law” prioritizes business and aims to drive economic growth through expansion. It promotes the development of production facilities, allowing small and medium-sized enterprises to reclaim taxes. However, it fails to address the mounting national debt. During his appearance on Bloomberg TV Bulgaria’s Business Start with host Hristo Nikolov, Yanko Hristov, Head of Business Development and Sales at Alaric Securities, warned that the new law will add between $3.3 and $3.8 trillion in additional debt.

Market Fallout: Bonds Under Pressure, Crypto and Stocks on the Rise

The government bond market tends not to respond well to rising debt levels. Every investor should closely monitor the actions of the Federal Reserve and its chair, Jerome Powell, who is currently at odds with President Trump. On the other hand, interest rate cuts and the potential for rising inflation could negatively impact the U.S. economy.

“Trump’s unpredictability could seriously affect the markets in the long term. In terms of assets, stocks and crypto are expected to perform well, while bond prices are likely to fall,” the guest commented.

According to Hristov, the worst-case scenario between the government and the Fed would be a U.S. bond default. While unlikely, the prospect of significantly higher yields on government securities is entirely realistic.

Winners and Losers: Tesla, Healthcare, and the Price of Policy

Around 65% of personal bankruptcies in the U.S. stem from medical insurance issues and unpaid healthcare bills. Trump’s policies primarily affect the poorest segments of the population, which presents a major concern. “The outlook for companies in the healthcare sector remains unclear, but it’s possible their performance may deteriorate,” Hristov noted.

He reminded viewers that Trump’s law eliminates subsidies for Tesla. The company’s stock is experiencing a slight decline. The rift between Trump and Musk should not be underestimated. However, the company is also facing other challenges—electricity needed to power artificial intelligence must come from somewhere.

“Conventional energy, equities, and crypto assets will be the big winners from the ‘Big Beautiful Law,’” Hristov asserted.

Watch the full commentary in the video.

Source: BloombergTV Bulgaria