US bonds and the dollar slide continues

23rd May 2025

The US dollar is currently under pressure due to concerns over rising debt and fiscal policy changes.

Dollar Index Decline: The US Dollar Index (DXY) has fallen toward 99.50, reaching a two-week low. This decline is driven by investor concerns over the fiscal deficit and the impact of the recently passed Big Beautiful Tax Bill.

Bond Market Warnings: The 30-year Treasury yield briefly hit 5.15%, its highest level in 19 months, before retreating. Investors are wary of the growing national debt, which is projected to reach 134% of GDP by 2035.

Credit Downgrade: Moody's downgraded the US credit rating due to concerns over debt sustainability. This has increased borrowing costs and weakened investor confidence.

Market Reaction: The US stock market has seen declines, and the US dollar has weakened against major currencies like the Japanese yen. Investors are shifting funds to European and Chinese markets.

Federal Reserve Outlook: The Fed may hold interest rates steady through June and July, with a 71% chance of no rate cuts. However, future policy decisions could impact the dollar's trajectory.

Overall, the US dollar is facing downward pressure, with investors closely watching Senate discussions on the tax bill and potential Federal Reserve actions. If debt concerns persist, borrowing costs could continue to rise, affecting businesses and consumers alike.

Consequences
unemployment in the United States has been rising recently. The unemployment rate reached 4.2% in April 2025, marking a 0.3 percentage point increase from a year earlier.

Some key factors contributing to this rise include:

Slower job growth in sectors like manufacturing and retail.

Layoffs in tech and finance, as companies adjust to economic uncertainty.

Higher borrowing costs, making it harder for businesses to expand and hire.

Federal spending cuts, which have impacted government-funded jobs.

The Bureau of Labor Statistics tracks these trends, and economists are watching closely to see if the job market stabilizes or continues to weaken. If unemployment keeps rising, it could signal broader economic challenges ahead.

major companies are making significant layoffs in 2025, particularly in the tech industry. Over 61,000 workers have lost their jobs this year across 130 companies, including Microsoft, Google, Amazon, and IBM2.

Here are some of the biggest layoffs:

Microsoft: Cutting 6,000 jobs, its largest layoff since 2023.

Google: Gradually reducing its workforce, with 200 job cuts in May.

Amazon: Eliminated 100 positions in its Alexa, Kindle, and Zoox divisions.

IBM: Using AI automation to replace jobs, leading to layoffs in human resources.

Cybersecurity firm CrowdStrike: Cutting 5% of its global workforce.

The main reasons behind these layoffs include slower business growth, economic uncertainty, and the rise of AI automation. Companies are restructuring to reduce costs and improve efficiency, shifting focus toward engineering and AI-driven roles.

The tech layoff wave is still kicking in 2025. Last year saw more than 150,000 job cuts across 549 companies, according to independent layoffs tracker Layoffs.fyi. So far this year, more than 22,000 workers have been the victim of reductions across the tech industry, with a staggering 16,084 cuts taking place in February alone.

Layoffs are expected to continue as businesses adapt to changing market conditions.

Wallmart
Walmart is laying off around 1,500 corporate employees as part of a restructuring effort2. The layoffs primarily affect Walmart's Global Tech division and Walmart Connect, its in-house advertising arm.

Reasons for the layoffs:
Cost-cutting measures: Walmart is streamlining operations to reduce complexity and accelerate decision-making.

Automation & AI: Some roles are being eliminated due to increased automation, particularly in inventory forecasting and advertising.

Economic uncertainty: Walmart is adjusting to market conditions, including higher tariffs that may lead to price increases.

Impact:
Employees at Walmart's headquarters in Bentonville, Arkansas, and other corporate locations are affected.

Walmart is creating new roles alongside the layoffs to align with its growth strategy.

The company remains the largest private employer in the U.S., with 1.6 million employees.

Walmart has not commented directly on the layoffs, but executives say the changes are aimed at improving efficiency and innovation.