Almost unchanged the indicator S & P 500 on Thursday (22.5.2025) at Wall Streetrecording a marginal decline of 0.04%, as investors remain cautious about concerns about potential interest rates and the deterioration of the US budget deficit.
Similarly, Wall Street’s Dow Jones index completed the session without changes, while Nasdaq rose 0.28%.
At the same time, the performance of the 30 -year US government bond climbed to the highest level since October 2023, after Congress’s approval of a bill, which is considered likely to further burden the country’s budget.
At the same time, Congress approved a draft law that includes tax breaks and increased defense spending. The legislation – now transferred to the Senate – may significantly increase public debt, with estimates by the Budget Office for a cost of up to 4 trillion. dollars.
Investors are worried that in combination with the possible return of Trump duties, this measure can enhance inflationary pressures, which already affects the yields of government bonds.
“In the short term, the tax bill is good for the economy. It will boost GDP growth in 2026. It reduces taxes for many, increases expenditure – mainly for defense – and these data are reinforcement for the economy, “said Jed Ellerbroek, a portfolio manager at Argent Capital Management.
However, he warned that in the long run, the measure intensifies the fiscal deficit and has a negative impact on markets. “The rise in yields means falling prices on bonds, which gradually become less attractive and reliable, while our fiscal deficit remains extremely high for a long time without signs of returning to normal,” he said.
On Thursday, the yield on the 30 -year US government bond reached 5,161% – a price not recorded in the fall of 2023 – before recessed towards the end of the session. Correspondingly, the 10 -year bond was deducted from its high -ended intra -conference.
The upward trend in long -term returns, which directly affect the cost of borrowing for households and businesses, may further burden an economy already pressured by the imposition of new Trump duties.