The U.S. bond market remains under pressure as long-term yields hover near their yearly highs, driven by concerns over Donald Trump’s newly proposed tax plan. With a potential to add $4 trillion to the national deficit, the proposal is sending shockwaves through financial markets — and well beyond Washington.

Bond Market: Higher Yields, Higher Uncertainty

Although the tax legislation still awaits Senate approval, investors reacted swiftly. To compensate for increased fiscal risk, bondholders are now demanding higher yields. Ten- and thirty-year U.S. Treasury yields remain above 4.5% — a level that raises borrowing costs across the board, from mortgages to corporate loans.

Moody’s Downgrade Highlights Mounting Deficit Concerns

Credit rating agency Moody’s downgraded the U.S. credit outlook last week, a clear sign that confidence in America’s fiscal management is eroding. Analysts warn that a surge in debt issuance could spark inflationary pressure or drive investors to safer havens.

“The market understands: a growing deficit means more debt issuance, and that equals risk,” said Thierry Wizman of Macquarie.

Fed Remains Independent – For Now

Amid political and economic uncertainty, one reassuring development emerged — the U.S. Supreme Court ruled that members of the Federal Reserve’s Board of Governors cannot be arbitrarily removed, effectively shielding Fed Chair Jerome Powell from political interference. Investors see this as a stabilizing factor for monetary policy.

Households and Businesses: Who Will Feel the Pain?

Rising bond yields aren’t just a Wall Street concern — they directly impact everyday Americans. Mortgages, student loans, business financing — all become more expensive if the government keeps increasing its debt without a sustainable fiscal plan.

Stock Market Treads Carefully

Equity indexes responded cautiously on Friday:

🔸 Dow Jones fell by 0.04%

🔸 Nasdaq dropped 0.09%

🔸 S&P 500 was flat

This stagnation follows a week of declines, with investors worried that elevated yields could stall economic growth.

Summary

🔹 U.S. bond yields remain high amid Trump’s tax proposal

🔹 Moody’s downgraded the U.S. over rising deficit concerns

🔹 The Fed gains judicial protection from political interference

🔹 Higher yields mean costlier debt for households and businesses

🔹 Wall Street is cautious as fiscal anxiety spreads



#TRUMP , #USPolitics , #tax , #WallStreet , #worldnews

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