U.S. President Donald Trump meets with Japan’s Prime Minister Shigeru Ishiba (not pictured) on the White Home in Washington, U.S., Feb. 7, 2025.
Kent Nishimura | Reuters
President Donald Trump ordered a halt to the manufacturing of latest pennies, which he stated will assist scale back “wasteful” authorities spending.
“For much too lengthy the USA has minted pennies which accurately value us greater than 2 cents,” Trump stated in a Fact Social submit. “That is so wasteful! I’ve instructed my Secretary of the US Treasury to cease producing new pennies. Let’s rip the waste out of our nice nations price range, even when it is a penny at a time,” Trump wrote.
It is not clear whether or not the president has the authority to cease the manufacture of the 1-cent coin. In keeping with the U.S. Structure, coinage energy, as acknowledged by the Supreme Court docket, is “unique” to Congress. Federal regulation says the Treasury secretary can mint and situation cash as needed for the wants of the USA.
However at the very least one analyst on Wall Avenue expects that the penny’s days are numbered. TD Cowen’s Jaret Seiberg stated the halt will doubtless cross judicial evaluation, resulting in a scarcity of the coin.
“We consider this order would survive judicial evaluation, which is why that is prone to happen,” Seiberg wrote Monday. “We fear about this resulting in a scarcity of pennies, which might pressure retailers to pay banks extra for cash. It additionally provides authorized threat for retailers and banks. That would create the disaster wanted to pressure Congress to behave.”
Seiberg stated he expects this might assist the transfer towards digital funds, bolstering corporations equivalent to Visa, Mastercard and different real-time cost networks.
What is evident is that pennies value extra to make than they’re value. In 2024, the U.S. Mint spent 3.69 cents to fabricate every penny, in accordance with an annual report. That meant the price of every penny has run above its face worth for a nineteenth straight fiscal 12 months.
The most recent U.S. Mint report suggests the nickel higher watch its again, too. Every 5-cent piece prices the Mint 13.78 cents to make.