US Bond Market Signals Rising Deficit Risks Amid Global Yield Surge

The U.S. bond market is signaling deepening investor anxiety over the nation's escalating debt, particularly in response to President Donald Trump's proposed tax bill, which could add trillions to the federal deficit. Treasury yields on long-term bonds have surged to levels not seen since the early 2000s, reflecting concerns about the government's growing borrowing costs and weakened creditworthiness following Moody's downgrade of the U.S. credit rating. Weak demand at recent Treasury auctions and a global sell-off in government bonds underscore waning confidence, with analysts warning that rising interest costs could exacerbate deficits and risk triggering a debt spiral. Despite these warnings, the tax bill passed narrowly in the House and faces opposition in the Senate, with some Republican lawmakers citing the bond market's reaction as evidence against further deficit expansion. International observers, including BNP Paribas, caution that the U.S. debt situation could provoke a market crisis akin to the UK's mini-Budget turmoil, emphasizing the critical nature of upcoming congressional decisions. Overall, the bond market's response serves as a stark warning to Congress about the fiscal risks of swelling deficits amid political gridlock.