Speaker Mike Johnson’s efforts to pass President Trump’s spending bill is facing stiff resistance — including from investors.Credit…Chip Somodevilla/Getty Images
Budget jitters
House Republicans hope to push through President Trump’s “big, beautiful” spending bill as soon as next week. But investors are getting antsy.
Government bonds sold off again amid worries about the deficit-expanding effects of Trump’s tax cuts, the cornerstone of a major budget package being debated in the lower chamber. The budget bill faces stiff resistance — including from some Senate Republicans — and it’s putting America’s strained finances in focus.
The latest: Yields on the 30-year Treasury bond are steady on Thursday. But they climbed to nearly 5 percent on Wednesday, a level last reached in early April when “yippy” investors revolted against Trump’s reciprocal tariffs. A reminder: That helped force the White House to reverse course on those levies.
Stocks have rebounded since. But long-dated bonds have not, even as Trump continues to tour the Middle East, hailing a windfall of deals that he says will bolster American businesses and the economy. (More on that below.)
Could bond vigilantes again check the Trump agenda? They have flexed their power before, and may do so again if the proposed budget vastly adds to America’s $36 trillion national debt.
There’s reason for them to worry: The Republican bill, which would extend Trump’s 2017 tax cuts and introduce new ones for tips and overtime pay, could add $3.8 trillion to deficits over the next decade, according to the Joint Committee on Taxation — and potentially much more.
