Episode 589: Neal and Toby chat about the bond market getting shivers after Trump’s tax bill is projected to add to the federal deficit. Then, the US Treasury will finally put an end to adding new US pennies into circulation. Also, the box office has another blockbuster double-header with Mission Impossible and the Lilo & Stitch remake. Meanwhile, Bitcoin is the Stock of the Week and Nike is the Dog of the Week. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit endthecampaign.com for more Are you in NYC? Join us for a free trivia night June 3: https://mbd-trivianight-june3.splashthat.com/ Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - MBD Trivia Night 02:20 - Tax Bill Impact 07:40 - Goodbye Penny 11:00 - Lilo & Stitch vs Mission Impossible 14:40 - Stock of the Week: Bitcoin 17:50 - Dog of the Week: Penny 19:30 - Headlines All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative and involves a high degree of risk. Cryptocurrency holdings are not protected by the FDIC or SIPC. APY as of 3/18/25, subject to change. *Terms and Conditions apply. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What impact will the new tax bill have on the economy?
Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the House passed a sweeping tax bill. We'll tell you what it means for the economy and for your wallet.
Then RIP to the penny. The U.S. Treasury will stop minting one set coins in a matter of weeks. It's Friday, May 23rd. Let's ride.
If you're listening to today's episode on the Friday before Memorial Day weekend, well, you're committed to being informed. So why don't you prove it by coming to Morning Brew Daily's In Real Life trivia night on June 3rd, where you can create a team and compete against other listeners in what will be a really amazing night.
Toby and I are hosting, of course, and we are hard at work writing questions that will entertain and delight. Plus, we can't wait to meet you all in person.
Here are the details. It's going to be in New York City, June 3rd. That's a Tuesday at 6pm at a very trendy bar in the East Village. We can't tell you the exact location on air. That comes when you sign up for the event, which you can do by following the link in the show description.
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Chapter 2: Why is the U.S. Treasury discontinuing the penny?
I am so excited for this, Neil, because it means we get to hang out with you all in person and be wildly impressed with how smart and plugged into the news cycle you guys are. So once more, June 3rd, 6 p.m. in the East Village, Trivia Night with Neil and I. There will be prizes. So sign up at the link in the show description. And now a word from our sponsor, Iterable.
Neil, you're a group chat guy. I see you discussing show topics with your college friends, but everyone's on different time zones, right?
Oh yeah, I'll drop a banger of a trivia question at 7 a.m. after we wrap up the show and eight hours later, someone chimes in with the answer.
But they always get it right because your friends are smart. But that's what marketing feels like when you're locked into fixed campaigns. You might send a message when you're ready because your campaign calendar says so, but it might not be when your customer is ready. Iterable flips that.
Chapter 3: What are the box office projections for Mission Impossible and Lilo & Stitch?
It listens to the customer, not the calendar. So the message hits when they open the app, browse a product, really whenever the opportune moment is.
It's getting the whole group chat on the same time zone, real-time personalized engagement powered by AI and fueled by customer data across every channel.
So stop marketing like it's 4 a.m. in the wrong time zone. Go to endthecampaign.com. You may not have been productive at work counting down the hours till MDW, but the House of Representatives was. Republicans in the chamber passed a sweeping tax and spending package they've dubbed the one big beautiful bill that will have major implications for the US economy and your personal finances.
Chapter 4: How is Bitcoin performing as the Stock of the Week?
The bill is indeed big. Containing a smorgasbord of GOP priorities, it extends President Trump's tax cuts for all income groups from 2017, which were set to expire at the end of this year, and heaps on even more tax relief on top of that, including a bigger child tax credit, a higher standard deduction, and the elimination of taxes on tips, overtime pay, and Social Security benefits.
It also ramps up spending on certain things like border security, national defense, and support for farmers. It decreases spending on certain things, too, like Medicare, food aid, and tax credits for clean energy projects. But that's not enough in savings to account for the lost revenue from the tax cuts.
Independent analysts estimate that the bill will increase budget deficits by about $2.7 trillion over a decade, which has spooked the bond market in recent days by worsening the U.S. 's already concerning fiscal situation.
Democrats don't find this bill beautiful at all, calling it a reverse Robin Hood situation in which the government is taking from the social safety net to fund tax cuts for the wealthy, but they're not in the majority. So even though no Dems voted for it, it may become the law.
And I say may, because as you know from Schoolhouse Rock, the bill will now head to the Senate, which must also pass it before President Trump makes it official through his signature. So Toby, a long way to go, but this sweeping tax bill is one step closer to reality.
So let's start with how this might affect your tax bill though. More than eight in 10 households would get a tax cut in 2026 under this bill's current form. The average household is looking at a 2026 tax cut of around $2,900 compared to what it would pay if those 2017 cuts actually went in expired.
So pretty solid there, but also 60% of those tax cuts would go to the top 20% of households with more than one third going to those making over $460,000 or more. If you're a family, you're also going to stand to benefit from this. There's a temporary $500 increase in the child tax credit. Plus, all newborns are going to be given $1,000 in this kind of unique concept called a Trump account.
It's fueled by a one-time deposit by the federal government. So if that bill passes, parents can contribute to that account. It would just go towards a broad base market, uh, tracking the U S stock index. So that is kind of the play by play of who specifically is going to affect, which is a wide and broad swath of people.
It will also disproportionately help higher income earners in New York, New Jersey, California, these high income States, because there's this salt, uh, The tax deduction, which was probably the biggest sticking point of the bill, the state and local tax deduction, which was capped at $10,000 in 2017, that is now expanding to $40,000 up until incomes of $500,000.
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Chapter 5: What does the future hold for the nickel after the penny's discontinuation?
Chapter 6: What should we expect from the bond market in response to the tax bill?
Chapter 7: How will the new tax bill affect middle-class families?
It means that borrowing costs are going up across the economy. If you're going to finance a car, if you're going to mortgage your house, we have mortgage rates at over 7% now. So that is raising borrowing costs across the economy. And the reason for that is bond investors are very concerned about the American about the United States fiscal situation.
We just had this Moody's credit rating cut on Friday. And the general feeling right now with this bill adding two point seven trillion dollars to deficits is that The United States is digging itself into a deeper and deeper hole. And when bond yields go up, that means that's basically a proxy for how much it costs the government to borrow.
So we're already paying $1.1 trillion in interest payments per year last year. And now we're going to have even, you know, when you borrow money, the interest payments are going to continue to go up. So the bond market is throwing a bit of a tantrum. We'll see whether lawmakers respond by paring back some of the deepest cuts of this bill.
Moving on, the penny has entered a heads I win, tails you lose scenario with the U.S. Treasury. One cent coins are being officially phased out. According to the Wall Street Journal, the Treasury Department will stop putting new pennies into circulation by early next year, instructing businesses to get ready to round prices up or down.
You don't need to pay a penny for the government's thoughts to figure out why they pulled the plug. There has been a long bipartisan effort to ditch the lowest unit of American currency, spanning from Obama to Trump, primarily due to costs. The Mint expects to save about $56 million a year through reduced material costs after putting an end to the most confounding of currency calculus.
Each penny is worth only one cent, but costs nearly four cents to make. Add it all up, and the U.S. lost more than $85 million last year on the coin. As for what is going to happen to prices, non-cash transactions will still be priced in exact increments, but businesses will have to round prices to the nearest five cents for cash transactions. Neil, it was probably time.
60% of actively circulating coins sit in coin jars, according to the Federal Reserve. But still, the penny is so much a part of American culture. Penny stocks, a penny saved is a penny earned. Offering your two cents, it's hard to imagine life without it.
And it will still stick around. And that's because we're not eliminating the concept of the penny. We're just eliminating the actual coin itself. That's exactly what our friends to the north did Canada in 2013. They eliminated the penny, but prices online specifically will probably stay in the cent range. You'll probably buy something for $2.11 or $2.16 today.
because when you pay with a credit card you don't need to pay with an actual penny itself so it'll be very interesting to see how retailers play this to say whether you go into a store and you see a cash version a cash price for a particular good that's rounded up to five cents or you see a credit card price that is you know the exact change that you would pay typically in cash but you're with a penny but you wouldn't any more so we'll see how retailers play this can be very interesting it hasn't
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Chapter 8: What are the expected benefits for clean energy companies?
Yeah. And no need to go and throw your pennies away right now, if you even have any, because they will remain legal tender. You can pay with them. And then also fewer than one in five payments are actually made in cash, according to the Federal Reserve Bank of Boston. So it's not going to rock a lot of boats. A lot of people are already tapping their Apple Pay. They're paying with credit cards.
And yeah, Americans throw away up to $68 million in coins a year. So it's not like people are really using these things a lot. One thing that is a second order effect of this is that if pennies go out of circulation, what's going to become more in demand? And that are nickels. And the nickel is a disaster when it comes to its production costs. Obviously, a nickel is worth $0.05.
It costs about $0.14 to produce in the last fiscal year. So that's up 20% from the year before. So you're saying like, hey, we're trying to save money here by phasing out the penny. The nickel might be even more costly.
Barbenheimer it ain't, but this weekend's box office matchup of Mission Impossible vs. the live-action Lilo and Stitch is certainly popcorn-worthy. Just to set the stage, Mission Impossible The Final Reckoning is set to hit theaters as the last installment in what's become Hollywood's greatest action franchise.
Tom Cruise has left it all on the court playing Ethan Hunt, a field agent whose death-defying stunts include a halo jump, driving a motorcycle off a cliff, and in Final Reckoning, hanging off the side of a biplane zooming at 170 miles per hour.
And then there's Lilo and Stitch, Disney's live action remake of the 2002 cult classic featuring a little blue alien who causes chaos on Earth after crash landing into Hawaii. While flying under the radar for more than a decade, Stitch has turned into IP gold for Disney, attracting legions of fans who were born years after the original came out.
On Disney+, for example, Lilo and Stitch content is viewed about as much as The Little Mermaid. So listeners, which movie do you think is projected to earn more at theaters this weekend? The answer is Lilo and Stitch, which is expected to gross more than $165 million domestically, which would be as monstrous as its title character.
Mission Impossible is also supposed to perform well, but not as well, with projections of around $80 million. Toby, in the double feature, which are you seeing first?
Well, first of all, I'm trying to come up with the Barbenheimer version of this. And all I got is Miss Stitch and Possible Lilo or Mission Stitch Possible. They're all bad. So don't even try to stitch them together. I guess pun intended there. But yeah, Lilo and Stitch is just this movie that has gained so much groundswell.
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