Overview

• The U.S. House of Representatives approved President Trump’s budget bill on May 22, which could expand the deficit by $2–4 trillion over the next decade.
• Yields on 30-year U.S. Treasury bonds reached 5.13%, the highest level since the 2007 financial crisis, while 10-year yields climbed to 4.61%.
• A weak 20-year bond auction on May 21 signaled growing investor unease about the ability to finance U.S. government debt.
• Moody’s recently downgraded the U.S. credit rating from triple A, further eroding confidence in the country's fiscal outlook.
• With public debt surpassing $36 trillion and interest costs outpacing major budget items, market doubts over fiscal sustainability are intensifying.