Musk’s government spending cuts fail to halt rising costs

Good morning and welcome again. Immediately we’re overlaying:

• The rise of presidency spending regardless of Musk’s cuts

• Russia’s rejection of the 30-day ceasefire proposal

• Intel appointing a brand new CEO

• Widening junk bond spreads

Elon Musk’s hyperactive effectivity drive failed to forestall US federal spending rising to a report $603bn final month, new Treasury information has revealed, highlighting the Trump administration’s issue in drastically reducing the scale of presidency.

Musk’s so-called Division of Authorities Effectivity claims to have already made greater than $100bn of financial savings, however solely a handful of departments registered any drops in spending within the first full month of the brand new administration, the info reveals.

Total spending rose by $40bn in contrast with the identical month final 12 months on a like-for-like foundation, a 7 per cent enhance.

The brand new information comes after Musk and his emissaries at Doge have infiltrated a number of authorities companies, together with the state and well being departments, and numerous arms of the Treasury. Tens of 1000’s of staff have been suspended or dismissed and 1000’s of presidency grants and contracts have been cancelled.

The brand new figures illustrate the problem of creating any significant influence on authorities spending by concentrating on cuts, with rises in the price of healthcare spending, social safety outlays and debt servicing dwarfing any financial savings in departmental budgets.

Brendan Duke, a former financial adviser to Joe Biden’s White Home who now works for the Middle on Price range and Coverage Priorities, mentioned though it was “early days” for the administration’s cost-cutting drive, the figures had been “a helpful corrective for the concept that the financial savings can be so massive that there can be a Doge dividend that can quantity to 1000’s of {dollars} per household”.

Nonetheless, as we speak marks the deadline for presidency companies to submit plans for a second wave of lay-offs to slash their budgets. Companies are required to put their proposals to the White Home and the Workplace of Personnel Administration, kicking off a course of that would remove 1000’s extra federal jobs. Read more on the Treasury report.

Right here’s what else is occurring as we speak:

• Financial information: The US Division of Labor is scheduled to launch February’s producer value index, a day after the patron value index fell more than expected.

• Outcomes: Greenback Basic is the newest retailer to report earnings. It’s anticipated to have benefited from rising demand for its discounted groceries in addition to non-essential gadgets.

• G7: Canadian overseas minister Mélanie Joly hosts two days of talks towards a backdrop of rising commerce tensions and divisions over Ukraine.

Be part of FT consultants on March 27 for a subscriber-only webinar, as they talk about Ukraine’s future with Russia’s full-scale invasion coming into its fourth 12 months. Register for free.

5 extra high tales

1. A senior aide to Vladimir Putin has dismissed the proposed 30-day ceasefire within the Ukraine warfare as “nothing apart from a short lived breather for Ukrainian troops”. Yuri Ushakov, the Russian president’s overseas coverage adviser, made the feedback on state tv as Steve Witkoff prepares to journey to Moscow to debate the proposal. This is a developing story.

2. Intel has appointed Lip-Bu Tan as its chief govt, ending a months-long seek for a brand new chief after the US chipmaker’s board ousted Pat Gelsinger in December. Tan stop the board in August in an obvious disagreement over the corporate’s path beneath Gelsinger. Here’s more on the industry veteran’s return to Intel.

3. Blackstone’s Stephen Schwarzman and Goldman Sachs’ David Solomon have mentioned there are upsides to Trump’s insurance policies, even because the president’s tariffs have fuelled recession fears. Solomon mentioned chief executives had been excited by strikes to chop crimson tape, whereas Schwarzman mentioned there have been many attainable eventualities and “it’s just way too early to play this out”.

4. The US communications regulator is making a nationwide safety council to counter Chinese language cyber assaults and assist it keep forward of China in crucial applied sciences, equivalent to synthetic intelligence. The Federal Communications Fee’s transfer comes as its remit has broadened in the face of hostile acts by Beijing.

5. Donald Trump has tapped Federal Reserve governor Michelle Bowman to be vice-chair for supervision on the US central financial institution, a White Home official mentioned, elevating a champion of light-touch banking regulation to the put up. The move was welcomed by Wall Street.

The Large Learn

After three years of warfare, a attainable respite is in sight with Ukraine agreeing a US-brokered 30-day ceasefire with Russia. However many Ukrainians suspect that even when a settlement is reached, Russia is not going to honour it and warfare will resume — and lots of are prepared to fight on, even with out American help.

We’re additionally studying and watching . . . 

• Pretend fiscal conservatives: Republicans are indulging in budgetary chicanery to protect Trump’s tax cuts, writes Oren Cass.

• Trump, emancipated: Public opinion, which stored him in examine final time round, issues far much less to a president who can’t run for a third term, writes Janan Ganesh.

• $50 a barrel oil: The Trump administration desires crude costs to fall, however whereas decrease costs will profit shoppers they might throttle the same oil industry he wants to expand.

• 🎬 Nvidia’s rise: Our latest FT film explores the corporate on the centre of the AI increase, and the way it has weathered the fallout from China’s DeepSeek.

Chart of the day

The extra borrowing prices paid by junk-rated US corporations in contrast with US Treasuries has jumped to a six-month high as issues develop in regards to the threat of a US recession. Junk bond spreads, an vital measure of perceived dangers throughout US markets, have jumped by 0.56 share factors since mid-February to a six-month excessive of three.22 share factors.

Take a break from the information . . . 

Heading to Lagos for a piece journey? Past packing plenty of sunscreen, additionally, you will must know the dos and don’ts of enterprise. Our west Africa correspondent Aanu Adeoye has you lined within the newest FT Globetrotter guide to business etiquette.