The House has narrowly passed a sweeping Republican-backed spending bill, marking one of the most significant fiscal moves in recent history. The legislation, championed by President Trump and Speaker Mike Johnson, extends the 2017 tax cuts, injects billions into defense and border security, and slashes funding for Medicaid and clean energy programs. The bill’s passage came after intense negotiations, with the final vote standing at 215-214, barely securing approval.
The financial implications are staggering. The bill raises the debt ceiling by $4 trillion, while adding $6 trillion to the deficit over the next decade. Analysts warn that this could push Treasury yields even higher, further tightening credit markets. The 10-year Treasury yield has already surged past 4.62%, forcing investors to reconsider their positions in global markets.
Home sales have slowed to their weakest pace since 2009, reflecting the strain of rising interest rates and economic uncertainty. Mortgage rates have climbed past 7%, pricing out many first-time buyers. The housing market, once a pillar of economic stability, is now showing signs of distress as affordability continues to decline.
Republican lawmakers are divided. Fiscal conservatives argue that the bill fails to cut spending enough, while moderates insist that defense and tax priorities must be protected. The Freedom Caucus has emerged as a last line of resistance, warning that unchecked spending could trigger a debt crisis. Some members believe that a bad bond auction may be necessary to force Washington to confront its fiscal reality.
The coming weeks will determine whether the Senate makes significant changes or pushes the bill forward as is. If Treasury yields continue climbing, expect market volatility, tighter lending conditions, and increased pressure on policymakers to stabilize the economy.
Sources
https://time.com/7287722/trump-big-beautiful-bill-house-rules-committee-floor-vote-republicans/