Finance

Trump aims at ‘wasteful’ spending by ordering end to penny production

Published

2 weeks ago

February 10, 2025

U.S. President Donald Trump meets with Japan’s Prime Minister Shigeru Ishiba (not pictured) at the White House in Washington, U.S., Feb. 7, 2025.

Kent Nishimura | Reuters

President Donald Trump ordered a halt to the production of new pennies, which he said will help reduce “wasteful” government spending.

“For far too long the United States has minted pennies which literally cost us more than 2 cents,” Trump said in a Truth Social post. “This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump wrote.

It’s not clear whether the president has the authority to stop the manufacture of the currency. According to the U.S. Constitution, coinage power, as recognized by the Supreme Court, is “exclusive” to Congress. Federal law says the Treasury Secretary can mint and issue coins as necessary for the needs of the United States.

But at least one analyst on Wall Street expects that the penny’s days are numbered. TD Cowen’s Jaret Seiberg said the halt will likely to pass judicial review, leading to a shortage in the coin.

“We believe this order would survive judicial review, which is why this is likely to occur,” Seiberg wrote on Monday. “We worry about this leading to a shortage of pennies, which could force merchants to pay banks more for coins. It also adds legal risk for merchants and banks. That could create the crisis needed to force Congress to act.”

Seiberg said he expects this could support the move toward electronic payments, bolstering companies such as Visa, MasterCard and other real-time payment networks.

What is clear is that pennies cost to make than they are worth. In 2024, the U.S. Mint spent 3.69 cents to manufacture each penny, according to an annual report. That meant the cost of each penny has run above its face value for a 19th straight fiscal year.

The latest U.S. Mint report suggests the nickel better watch its back too. Each five-cent piece costs the Mint 13.78 cents to make.

Finance

Steve Cohen says tariffs and DOGE’s cuts are negative for economy, market correction could be soon

Published

2 hours ago

February 21, 2025

Business Finance News

Steve Cohen, chairman and CEO of Point72, speaking to CNBC on April 3, 2024.

CNBC

Billionaire investor Steve Cohen doubled down on his negative view of the U.S. economy due to a backdrop of punitive tariffs, immigration crackdown and federal spending cuts spearheaded by the Department of Government Efficiency.

The chairman and CEO of hedge fund Point72 said he turned bearish for the first time in a while after President Donald Trump’s aggressive trade policy made him worry about inflationary pressures and lower consumer spending. Meanwhile, his tough stance on immigration could mean a constrained supply of labor, he said.

“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen said Friday at the FII Priority Summit in Miami Beach, Fla. “On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as … the last five years and so.”

The prominent hedge fund investor took a stab at DOGE’s cost-cutting moves led by Elon Musk, saying they could only hurt the economy more. Musk has said his goal is to cut federal spending by $2 trillion.

“When that money has been coursing through the economy over many years, and now, potentially it will be reduced or stopped in many ways, has got to be negative for the economy,” Cohen said.

Cohen believes a pullback in the stock market could be likely given the uncertain macroeconomic environment. He sees the U.S. economy growth to slow down to 1.5% from 2.5% in the second half of the year.

“I think we’re seeing the regime shift a little bit. It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction,” Cohen said. “I don’t think it’s going to be a disaster.”