Trump's tax cut plans face bond market headwinds, GOP lawmakers warn

Published On Jan 16, 2025, 12:13 PM

Republican lawmakers are expressing concerns that former President Trump's proposed expansion of tax cuts could exacerbate the federal budget deficit, which is currently about $2 trillion annually. Rising interest rates on the national debt, now at $36 trillion, may make it difficult for the government to finance these tax cuts. Lawmakers warn that if the bond market loses confidence in the U.S. government's ability to service its debt, it could lead to increased borrowing costs for consumers in housing and credit. The ongoing budget issues and the likelihood of rising bond yields could have negative implications for the stock market as well.