The recently passed budget bill by Republicans aims to lower taxes but is set to expand the deficit significantly, potentially adding trillions to the national debt. Rising bond yields reflect investor concerns as selling pressure increases due to the perceived instability of U.S. financial positions. In turn, as treasury yields rise, stocks are losing their appeal. This shift is compounded by mixed corporate earnings reports from major companies like Ralph Lauren and news of investment bank upgrades for firms like Zoom, indicating a complex financial landscape ahead.
The new budget bill passed by Republicans aims to lower taxes while increasing spending, resulting in a projected expansion of the federal budget deficit by trillions.
Bond investors responded to the government's financial instability by selling bonds, leading to rising bond yields, with the 30-year Treasury yielding 5.1%—the highest since October 2023.
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