#ForexChief #Fed #forexnews #JoeBiden #dollar #worldnews #Medicare ⠀
💡 Inflation Reduction Act: Fed steps in, but does not guarantee the result⠀
👉 Fed's priority remains to bring inflation down to 2%, and for this, the base rate was raised again by 0.75%. The new law passed on Sunday without Republican support by parliamentary consensus, will be the main course of action for the Democrats and personally Joe Biden.
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The «price of the document» is $400 billion. The law provides for funding initiatives in the field of «clean» energy, reducing healthcare costs, creating new jobs and increasing taxes for large businesses, mainly industrial corporations. Some of the topics in the Law that are worth paying attention to are:
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• Cheap drugs - prescription only
Medicare will be able to negotiate prices for some expensive drugs with prescription drug manufacturers. There will also be a $2,000 per year limit on out-of-pocket expenses for Medicare members. However, critics argue that the new policy will hamper pharmaceutical companies' innovation.
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• Tax incentives for buyers of electric vehicles
An investment of $369 billion is envisaged: the money will go to solar panels, wind turbines and other sources of clean energy.
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• Increasing corporate taxes
Companies with at least $1 billion in revenue will apply a 15% tax rate on balance sheet income, which should generate $313 billion in new revenue.
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• Share repurchase taxA 1% excise tax on share repurchases could bring in about $74 billion and have a massive impact on the entire market.
According to the latest version published by the Senate, about $433 billion will be spent on new investments, the state budget deficit should decrease by $300 billion. Of course, reducing the deficit can curb demand in the economy and help lower prices, but the overall effect of the implementation of this Law is estimated to be weak. His political task is much more serious - to support the Biden team before the autumn elections.
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Let's see how the real dollar reacts to this.
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Profits to y’all!