The “large and beautiful” tax bill, Donald Trump, increases our debts

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Your guide to what the second period of Trump means to Washington, business and the world

The “Great and Beautiful” tax law for President Donald Trump is sharply increasing from the American public debt, which raised an ultimatum between investors and feeds questions about the period that the world will finance Washington’s education.

The United States in the long run Borrowing costs rose At the beginning of this week, after the Congress Committee applied on Sunday a budget bill that can add trillion dollars to the federal deficit during the next decade by extending tax cuts. The bill was submitted after Moody’s on Friday from the United States of its virgin credit rating.

The draft law and Credit She added to anxiety about the sustainability of American public financial resources at a time when many investors and analysts say that religion and deficit are uncomfortable.

“It seems like being on a boat heading to the rocks and the presence of those who run the ship arguing about any way to convert it,” said Ray Dalio, the founder of the billionaire of the hedge box.

He added: “I do not care if they are running left or right as much as I am interested in resorting to the ship restoring the path.”

The proposed legislation, which Trump called repeatedly called “the big and beautiful bill”, will extend the forkm tax The discounts were passed in 2017 during the first president’s term.

It will also lead to significant discounts in the Medicaid insurance scheme for low -income individuals and the food aid program. Republicans are eager to pay discounts in spending.

Caroline Levitt, the White House press secretary, said on Monday that the bill “does not add to the deficit”, the other, hesitated. Trump Administration officials who suggested that tax cuts will speed up economic growth.

But the non -party committee of the responsible federal budget estimates that legislation will increase the public debt by at least 3.3 followers until the end of 2034. It will increase the debt ratio to GDP from 100 percent today to 125 percent. This would exceed the rise to 117 percent expected during that period under the current law.

Meanwhile, the annual deficit will rise to 6.9 percent of GDP from about 6.4 percent in 2024.

The increase in public debt must be funded by investors, as the Treasury is accelerating bond sales. However, there are signs that debt investors will insist on the highest returns to buy debt, and increase borrowing costs.

The return of the Treasury Ministry increased for 30 years on Monday to its peak by 5.04 percent, its highest level since 2023 after the House of Representatives budget committee advanced in the legislation and following the reduction of MOODY rankings on Friday.

“We are at a turning point in the treasury market where in order to stay at these current levels, we need some good news about the deficit, soon,” said Tim Magnuson, chief investment official in Gardda Capital Partners. “The bond market will be discipline if there is one.”

He said that Edward Yardini, President of Yardini, research, formulated a term that was formulated in the 1980s to describe a violent reaction in the market to financial looseness: “The bonds have been fulfilled, and they are ready to move them.”

Dalio said that the United States needs to reduce its deficit quickly to 3 percent of GDP through some mixing of spending, increasing revenues and reducing real borrowing costs.

Bill Campbell, director of the portfolio of the Doubleline investment group, indicated that he was “underweight” in the treasury for 20 and 30 years. “There is no serious effort to curb debts,” he said.

The United States has long managed to operate a large deficit compared to other countries due to the vast global appetite for the Treasury Treasury, such as the world -class reserves in the world, and the dollar.

This gave the United States Big elasticity In its public funds, in the view of the classification agencies. But the last challenge comes at a time when financial concerns and anxiety of Trump’s tariff make investors more concerned about their exposure to the dollar assets.

“The main problem is that the market has been rated structurally re -evaluated the twin deficit,” said George Saravilus of Deutsche Bank.

He said that the “decreasing appetite for the purchase of American assets and the hardening of an American financial process stands in a very large deficit is what makes the market very tense.”

Additional reports by Steve Chavez