US EditionInvestors see worsening US deficit outlook as tax bill heads to Senate
- On Thursday, May 22, 2025, the House of Representatives approved a comprehensive bill involving tax and expenditure measures, which now advances to the Senate for consideration.
- This bill comes in the wake of Moody's decision on May 16 to lower the United States' credit rating, amid escalating worries about the federal government's expanding debt and deficit situation.
- According to the Congressional Budget Office, the House version of the tax bill is expected to increase the federal debt by approximately $3.8 trillion over the next ten years, despite claims of $1.6 trillion in spending reductions.
- Mohit Mittal, PIMCO's chief investment officer, said the final bill will likely cost $50 billion to $75 billion more annually than markets anticipated, while Steve Sosnick warned it risks larger budget deficits.
- Investors and lawmakers expect that Senate debate may reduce spending cuts, add stimulus, and increase the deficit, with financial market reactions possibly influencing the bill's final version.
13 Articles
13 Articles
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Worrying US Budget Drift
EDITORIAL. In the United States, the House of Representatives passed, under pressure from Donald Trump, the bill that brings together the main priorities of the US President. A text that will degrade the living conditions of the poorest, widen the deficit and inflate the public debt.
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.
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