Private Client Group

May 28th, 2025

Focus on Treasurys, House Passes Tax Bill, Massive Wealth Transfer Coming

Share
Subscribe

In this week’s Steady Investor, we unpack timely headlines and market indicators that could shape your next financial move—such as:

Why the Market is Increasingly Focused on U.S. Treasury Bonds – Equity markets experienced pronounced volatility midweek, but it did not have to do with a breaking news story on trade or anything related. It was about government bond yields, which surged on the back of tepid investor demand. A poorly received auction of 20-year Treasury bonds intensified concerns about the government’s growing debt load, pushing the 30-year yield to its highest point in over a year. At the heart of the issue is the rising volume of federal borrowing required to finance widening deficits—an increasingly visible stress point for markets.As the supply of Treasury bonds climbs to finance rising spending, investors have been watching auction markets closely to gauge how new issuance would be received. Somewhat muted demand signaled unease about how much more the market can absorb without higher yields. And that repricing spilled over into equities, where all major indexes posted notable losses.Beyond bond supply, inflation worries remain front of mind. Companies and consumers are signaling pressure from rising prices and policy uncertainty, and retailers have begun flagging weaker discretionary spending and cautious consumer sentiment. In some investor’s minds, this combination raises the possibility that the economy could face both slower growth and persistent inflation in the months ahead, which is another set of forces that could push Treasury bond yields higher.1

Don’t Let Fear Derail Your Retirement

Trying to time the market might seem like taking control—but it often leads to costly mistakes. Selling during downturns means locking in losses and missing the recovery that follows. This common behavior can significantly reduce your retirement savings over time.

For more insights, we recommend downloading our free retirement guide, How Market Timing Can Affect Your Retirement Plan2,” which reveals:

If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:
 
Download Zacks Guide, “How Market Timing Can Affect Your Retirement Plan.”2

The Tax Bill Passes the House. What’s In the Bill and What’s Next – In a narrow vote, the House of Representatives passed a far-reaching tax-and-spending bill that combines a series of longstanding fiscal priorities into a single legislative package. The bill extends and expands upon earlier tax cuts, while introducing significant reforms to federal entitlement programs. Though the measure cleared the House, it now moves to the Senate, where it is expected to undergo changes ahead of a potential vote later this summer.At the center of the bill are provisions to extend individual income tax cuts passed in 2017, to broaden deductions for families and workers, and to introduce new exclusions—such as those for tips, overtime pay, and Social Security income. The legislation also modifies the state and local tax (SALT) deduction by lifting the cap to $40,000, with phaseouts at higher income levels. On the corporate side, the bill makes modest adjustments to multinational tax rules and includes a new levy on outbound remittances.

Initial estimates suggest the package could add approximately $2.7 trillion to the deficit over ten years absent faster economic expansion, which again speaks to the concern raised above regarding bond markets. Indeed, markets are increasingly sensitive to fiscal risks, and the combination of rising deficits, sticky inflation, and ongoing Treasury issuance may continue to put pressure on long-term interest rates.3

The Coming $50 Trillion Wealth Transfer – Much has been made of the coming multitrillion-dollar “Great Wealth Transfer” from older Americans to younger generations. But before that intergenerational handoff takes place, a significant share of assets will first be passed between spouses—most often from husbands to wives. According to a recent study, roughly $54 trillion will change hands through inter-spousal transfers between now and 2048, with over 95% of that wealth ultimately going to women.This pattern reflects both demographic realities and longstanding household financial dynamics. Women tend to outlive men, and in many older households, men have historically handled most financial planning and decision-making. This dynamic creates risks if only one spouse is well-versed in managing investments, bills, and estate matters. In our view, the optimal path in any household is for both partners to be part of the planning process, to ensure broad financial literacy and a smoother transition when a spouse passes away.4

The Hidden Danger of Trying to Time the Market – Market ups and downs can trigger impulsive decisions—like trying to time the market perfectly or selling in a panic—that can seriously undermine your retirement goals.

Before you make any big moves, we recommend downloading our free guide, How Market Timing Can Affect Your Retirement Plan5.” This guide helps investors recognize common emotional pitfalls and provides actionable strategies to stay focused on your long-term success. Inside you’ll learn:

If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:

Disclosure

1 Wall Street Journal. May 21, 2025. https://www.wsj.com/finance/investing/global-stocks-markets-dow-news-05-21-2025-f2e9c9cc?mod=djemMoneyBeat_us

2 ZIM may amend or rescind the “How Market Timing Can Affect Your Retirement Plan” guide for any reason and at ZIM’s discretion.

3 Wall Street Journal. May 22, 2025. https://www.wsj.com/politics/policy/republican-house-tax-bill-revision-vote-79bbde41?mod=djem10point

4 USA Today. May 20, 2025. https://www.usatoday.com/story/money/2025/05/20/american-women-inherit-50-million-great-wealth-transfer/83722460007/

5 ZIM may amend or rescind the “How Market Timing Can Affect Your Retirement Plan” guide for any reason and at ZIM’s discretion.

DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.
READ PREVIOUS
The Disconnect Between Consumer Sentiment and the Market
READ NEXT
How Big a Deal is the Moody’s Downgrade of U.S. Credit?

Explore Zack’s Archives

View
Mitch's Mailbox
September 10th, 2025
Weak Jobs Reports, Inflation Worries, And The Fed’s Next Move
Read more
Private Client Group
September 8th, 2025
Global Yields, Earnings Strength, And Tariff Risks
Read more
Mitch on the Markets
September 8th, 2025
What Q2 Results Signal For Investors
Read more
Mitch's Mailbox
September 4th, 2025
What Can Investors Take Away From Revised Q2 GDP Numbers?
Read more
Private Client Group
September 2nd, 2025
Business Investment Rebounds, U.S.-China Trade Talks, AI Disruption Fears
Read more
Mitch on the Markets
September 2nd, 2025
The September Rate Cut Won’t Have A Big Impact 
Read more

Daily financial tips directly
from the Zacks family.

Top

Search

Contact

I'm a Private Client I'm a Financial Professional