Overview

• The U.S. House narrowly passed President Trump’s ‘One Big Beautiful Bill,’ which could add $3–5 trillion to the national debt over the next decade.
• Moody’s downgraded U.S. debt from Aaa to Aa1, citing increased fiscal risks, prompting a sell-off in bond markets and a spike in 30-year Treasury yields to 5.13%, the highest since 2007.
• Investors are alarmed by the U.S.’s twin deficits—budget and trade—as Trump’s policies, including 50% tariffs on EU imports, raise concerns about inflation and economic instability.
• Central banks, including Australia’s, are on alert for potential global fallout, with warnings of a ‘cataclysmic’ financial event if U.S. borrowing costs continue to climb.
• The Senate now faces the contentious bill as skepticism grows over the U.S.’s ability to manage ballooning debt and maintain its safe-haven status in global financial markets.