HAMISH MCRAE: Behind the scenes in the US, there are lots of reasons for concern

It's party time in America. Thursday saw Donald Trump get his 'big, beautiful' budget bill through Congress. The economy is still thumping out more jobs, another 147,000 in June. That helped share prices hit yet another all-time high, with the S&P 500 index now up 7 per cent this year. The chip-maker Nvidia pushed towards $4 trillion in value, making it worth more than all the companies on the London Stock Exchange put together.

And then on Friday it was the Independence Day holiday, not something we particularly celebrate in the UK, but I was glad to be watching the fireworks on a beach in Florida – the state that thanks to Trump and his Mar-a-Largo resort, can now make a decent pitch to have become the place where it all happens.

It's certainly a long way from that miserable news from Blighty about soaring Government borrowing costs, a tearful Chancellor and the prospect of more swingeing tax rises in her Autumn Budget.

And yet, and yet. Behind the scenes, there are lots of reasons for concern. Start with trade.

Next Wednesday is the deadline for countries to agree trade deals or be hit by much higher tariffs. The timing is absurdly tight, and Trump has said that countries where there is no agreement will get letters imposing tariffs of 20 to 30 per cent. This matters for Europe, which unlike the UK doesn't yet have even a basic agreement on future levies.

The markets in the US seem to think it will all be sorted: another case of the TACO trade, Trump Always Chickens Out. They have been encouraged by the fact that, so far, tariffs that have been imposed have not led to a significant increase in inflation. In theory, that's bound to happen, but in practice importers seem to be shouldering the burden by cutting their margins. You can only do that for a while.

Good day: Donald Trump got his 'big, beautiful' budget bill through Congress

Then there's the budget. In the UK, we are profoundly concerned about maintaining our credibility in the markets, and rightly so. In the US, they don't seem to care, and at the moment can get away with it. The budget, with tax cuts for the better-off and some small trimming of outlays, will inevitably increase the fiscal deficit.

I'm always suspicious of precise calculations about the impact of tax changes, and the overall effect may turn out to be quite modest. But the truth is that the US government plans to borrow around 6 per cent of gross domestic product for years to come.

Some of that money has to come from abroad, with foreigners currently owning about 30 per cent of the national debt. So far, they have been prepared to do so, but the mood could shift.

The main sign of such a change in attitude towards investment in US government securities has come in the exchange rate. So far this year, the dollar has fallen at the fastest rate since 1973. It is down more than 10 per cent on its trade-weighted average, and the lowest it has been for three years. You can soften the story a bit by pointing out that it was overvalued then, and it probably still is. As argued here last week, thanks to further dollar weakness, I expect the pound to go to $1.50.

To be clear, this is not a panic run on the dollar; more a sensible reassessment of what it ought to be worth. But coming on top of the tariffs, a weaker currency will push up prices, and like the rest of us, Americans are feeling pretty battered by inflation.

There's another warning signal: the housing market. It's gone soft. Prices are steady, nationally up just 0.6 per cent on a year ago. But the number of sales is down by 5 per cent, and there are 16 per cent fewer homes on offer. It's such a huge country that it's hard to generalise, but there is a feeling that the market has shifted from boom to stagnation, and in some areas, notably here in Florida, there's a slump.

So there are cracks in the feet of the US giant. But let's not kid ourselves. The rest of the world does not seem important from this side of the Atlantic. The money is here. New York dominates global finance, and as far as equities are concerned, it has utterly squashed London. It has been a humiliating week for the UK and rather a triumphant one for the US.