A key hurdle to Donald Trump’s tax reforms has been eliminated, as last night’s US Senate vote in favour of a 2018 budget resolution means the president will only need a simple majority of 51 senators, rather than 60, to pass his tax cuts. As a result he will not necessarily need to seek the support of Democratic legislators, assuming he can convince sufficient Republicans to back him. A major programme of tax cuts was key to the president’s election campaign, with pledges to slash income and business taxes, as well as cutting some of the deductions and loopholes which complicate the system. Great news on the 2018 budget @SenateMajLdr McConnell - first step toward delivering MASSIVE tax cuts for the American people! #TaxReformpic.twitter.com/aBzQR7KR0c— Donald J. Trump (@realDonaldTrump) October 20, 2017 The latest budget bill opened the way for tax cuts of $1.5 trillion (£1.1 trillion) over 10 years, and also allows for extra spending in areas such as defence. Stocks climbed modestly with the S&P 500 and the Dow Jones Industrial Average both closing up over 0.5pc, and gold sliding 0.6pc. Treasury yields climbed to a nine-year high while the move also raised expectations of further interest rate hikes from the Federal Reserve. Analysts believe the move should support stocks over the coming months - but those hoping for rapid progress on the tax plans may be disappointed. “Overhauling the tax code and cutting taxes significantly, as planned by the president, is a very complex process and it will be no easy task for the administration to please all sides and get enough support for the final tax bill to be passed,” said Brian Davidson at Fathom Consulting. “We believe that large corporate tax cuts will eventually be enacted, but this is more likely to happen in the first or second quarter next year, and not later this year as the administration hopes.” For markets “the upshot is that we expect the so-called 'Trump trade' to come back to life as tax reform progresses, although it may be a bumpy ride as delays occur and divisions between Republicans are made public,” he said. Mr Trump has pinned his hopes on tax cuts and spending hikes creating a substantial economic boost, with the result that tax revenues ultimately rise sufficiently to limit extra borrowing. White House announces Trump's proposed tax overhaul 02:04 Economists remain sceptical of the proposals, however, and some Republicans are also keen to avoid a large increase in borrowing - meaning the president can expect some tough negotiations with his own party. Meanwhile reports indicate that Jerome Powell, a governor at the Federal Reserve, is now the favourite candidate to replace Janet Yellen at the top of the central bank. Ms Yellen had been considered a shoo-in by markets as unemployment is low and inflation under control, while she is very gradually pushing interest rates upwards from the emergency levels introduced in the wake of the financial crisis. But in August she criticised the president’s plans to roll back the banking regulations introduced since the credit crunch and this is thought to have damaged her chance of being re-appointed when her term of office expires in February. Gary Cohn, chief economic adviser at the White House, was another leading contender. But he criticised Mr Trump’s reaction to the Charlottesville protests, undermining his chances of taking the role. Mr Cohn is also keen to push through major tax reforms, giving him an incentive to remain in his current role.