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Investors see worsening US deficit outlook as tax bill heads to Senate
- A tax and spending bill cleared the House on Thursday and will move to the Senate, where lawmakers plan to begin consideration once they return from the upcoming Memorial Day break.
- The bill is under close examination as investor worries grow following Moody's decision on May 16 to lower the credit rating for U.S. Government debt, intensifying concerns over the expanding federal deficit.
- The Congressional Budget Office estimates that the House version of the tax bill will increase the federal debt, currently at $36.2 trillion, by approximately $3.8 trillion over the next ten years, while Republicans anticipate that the tax cuts will generate $2.5 trillion in additional revenue.
- Brian Nick warned that Senate revisions might reduce spending cuts, add stimulus, and increase deficits, which could drive higher bond yields, while economist Christopher Hodge said prolonged debates raise the bill's final cost.
- The bill’s passage could keep bond yields elevated, increasing borrowing costs broadly, and financial market reactions may influence senators' decisions on the final bill version.
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Investors see worsening deficit outlook as tax bill heads to Senate
Investors are fearing that projections for the U.S. debt mountain could increase further when a sweeping tax and spending bill goes through the Senate, with the risk that bond yields stay higher for longer.
·Honolulu, United States
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Total News Sources6
Leaning Left1Leaning Right0Center5Last UpdatedBias Distribution83% Center
Bias Distribution
- 83% of the sources are Center
83% Center
L 17%
C 83%
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