The House passed President Trump’s $2.3 trillion “big, beautiful” budget bill by one vote, triggering a sell-off in U.S. Treasury bonds and raising fears about the national debt. Yields on 30-year bonds hit 5.1% — the highest since 2007 — as investors demanded higher returns amid rising fiscal risk.
The Congressional Budget Office projects the bill could add $2.3 trillion to the deficit over ten years. Despite promises of spending cuts, analysts and financiers say the bill delivers more tax relief than fiscal restraint, with cuts to health insurance and food assistance programs expected to impact millions.
Moody’s downgraded U.S. credit on May 16, further rattling markets. The Treasury’s 20-year bond auction drew weak demand, and both the S&P 500 and Dow Jones fell sharply this week.
Investors are watching closely as the Senate prepares to modify the bill. Some economists warn the combination of tax cuts, tariffs, and weak fiscal controls could destabilize markets further.
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