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The European Commission, led by Ursula von der Leyen, announced it will grant $150 billion in loans to member countries for defense spending.
The European Commission will exempt an additional €650 billion in defense spending from its excessive deficit procedure rules for member states.
Germany's new fiscal policy exempts all defense spending above 1% of GDP from the country's constitutional "debt brake" rule.
Germany has announced a €500 billion infrastructure spending package, equivalent to 12% of its GDP, to be spent over the next 10 years.
Alfonso Peccatiello predicts Germany's fiscal deficit will be in the 3% to 4% of GDP range going forward due to new spending policies.
Germany's new fiscal and defense spending package is expected to be passed into law by the current parliament before March 25th.
The recent single-day move in German government bond yields was the largest since 1990.
The United States imposed a 25% tariff on Canada, an outcome considered a worst-case scenario by market participants.
The earnings growth for the "Magnificent Seven" (MAG7) group of technology stocks has peaked.
Germany's plan to issue hundreds of billions in new bonds (Bunds) to fund defense spending will increase the supply of high-quality, Euro-denominated assets, making the Euro more attractive to central bank reserve managers.
The current market consensus is that the Trump administration's policy "put" is in the bond market, not the stock market, although a 20% decline in stocks would likely trigger a rate cut from the Federal Reserve.
The passage of Germany's new fiscal spending package requires the support of the Green Party.