In a rare moment of bipartisan sanity, Senate Republicans have pulled the plug on a $1bn earmark for a Trump-branded ballroom, a project that smacked of presidential hubris rather than sound investment. The decision, announced this afternoon, has sent ripples through the markets, with gilt yields ticking lower as traders applaud fiscal restraint on both sides of the Atlantic. It seems the ghost of Margaret Thatcher has finally crossed the pond.
The ballroom, which was to be a centrepiece of the Trump International Hotel in Washington, would have yielded a paltry internal rate of return, likely negative in real terms when adjusted for inflation. Instead, the funds will be redirected to infrastructure projects with actual economic multipliers. British fiscal prudence, often mocked as austerity, has found an unlikely champion in the GOP.
Chancellor Jeremy Hunt must be smiling, as his message of fiscal responsibility resonates even in the marble halls of the US Capitol. The market reaction is telling: the dollar strengthened slightly, and capital flight from speculative real estate into gilts and Treasuries accelerated. This is a vote of confidence for the bond vigilantes who have long warned against profligate spending.
The question now is whether this is a one-off or the start of a broader shift towards fiscal conservatism in Washington. For now, the message is clear: even in the age of populism, the bottom line still matters.
