The Economist: “Complacent about being the world’s haven, America has been budgeting without any sense of restraint. Over the past year the federal government has borrowed a staggering $2 trillion, or 6.9% of GDP, even though no crisis has drained its coffers. On May 16th Moody’s, a rating agency, stripped the country of its last headline triple-A credit score. Yet on May 22nd the House of Representatives passed, by just one vote, President Donald Trump’s ‘big, beautiful’ budget bill, which cuts taxes and raises deficits. Reflecting the rising fiscal risk, the yield on 30-year Treasuries has risen to 5.1%, the highest since 2007, amid a sell-off.”
“America has more fiscal leeway than other countries, but the Republican Party seems determined to test its limits.”
Josh Barro: Trump is about to learn you can’t spin the bond market.
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