Wed May 21 17:30:00 UTC 2025: Here’s a summary of the text, followed by a news article based on that information:
**Summary:**
U.S. Treasury yields are rising, with the 30-year bond yield exceeding 5% again, reaching levels that previously pressured the economy. This surge is driven by investor concerns that a new U.S. tax bill could worsen the country’s budget deficit, a risk amplified by Moody’s recent downgrade of the U.S. credit rating. Republicans’ tax bill could add trillions to the deficit over the next decade, increasing the supply of Treasury debt and putting downward pressure on bond prices. Ray Dalio warns that the Moody’s downgrade underestimates the threat to U.S. Treasuries, particularly the risk of the government printing money to cover its debts. The rising yields, especially for the 30-year and 10-year bonds, are impacting consumer loans like mortgages, as evidenced by a drop in mortgage applications.
**News Article:**
**Treasury Yields Surge, Fueling Economic Concerns Amid Tax Bill Debate and Downgrade Fallout**
**NEW YORK, NY** – U.S. Treasury yields climbed significantly on Wednesday, reigniting concerns about the potential impact on the economy and financial markets. The 30-year Treasury bond yield breached the 5% threshold for the second time this week, reaching levels not seen since January. The 10-year yield also jumped, returning to levels that sparked market volatility earlier this year.
The surge is fueled by anxieties surrounding a potential new U.S. tax bill championed by Republicans, which investors fear could exacerbate the nation’s already significant budget deficit. This concern was amplified by Moody’s recent downgrade of the U.S. credit rating, citing the increasing burden of financing the government’s ballooning debt.
Analysts warn that the proposed tax bill could add trillions of dollars to the U.S. deficit over the next decade, leading to an increased supply of Treasury debt and putting downward pressure on bond prices.
“The Republicans’ bill is expected to add trillions of dollars to the country’s deficit over the next decade. This will likely lead to an increase in the supply of Treasury debt, exerting pressure on the bond market,” noted Mark Haefele, UBS Global Wealth Management chief investment officer, in a note Wednesday.
Bridgewater Associates founder Ray Dalio has voiced even stronger concerns, suggesting that Moody’s downgrade underestimates the risk to U.S. Treasuries, particularly the possibility of the government resorting to printing money to meet its debt obligations.
The rising yields are already impacting consumer borrowing, with the Mortgage Bankers Association reporting a 5.1% drop in mortgage applications in the previous week, reflecting the increased cost of borrowing. Economists are not currently predicting a recession this year, but the rising yields, especially on benchmark 30-year and 10-year bonds, pose a potential threat to economic growth. The situation remains fluid as budget negotiations continue and the impact of the higher yields becomes more pronounced.
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