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5d ago

Trump’s Tax and Spending Bill Raises Global Debt Concerns

The U.S. bond market faces turbulence as Moody's downgrades the U.S. credit rating and Treasury yields climb to their highest levels in nearly two decades.

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The Japanese yen's rate against the US dollar and the Nikkei Stock Average in Tokyo on May 1.
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Overview

  • President Trump's 'One Big Beautiful Bill' narrowly passed the House, advancing to the Senate with potential revisions expected.
  • Moody's downgraded the U.S. credit rating to double-A, citing unsustainable national debt projected to increase by up to $5.7 trillion by 2034.
  • Yields on 30-year U.S. Treasury bonds surged above 5.1%, reflecting investor unease over rising deficits and fiscal discipline concerns.
  • Foreign investors are retreating from U.S. assets, signaling a 'buyer’s strike' as global bond markets react to increased borrowing costs.
  • Trump's tariff policies and mounting U.S. deficits are eroding confidence in Treasuries, weakening the dollar, and driving demand for alternative assets like gold and Bitcoin.