The New York Times reports:

The market for U.S. government bonds, the bedrock of the global financial system, continued to shudder on Thursday, as President Trump’s bill to extend expensive tax cuts and create new ones without significantly slashing spending passed through the House of Representatives. The bill has unnerved investors, deepening worries that the country’s debt is becoming unmanageable.

Yields on U.S. bonds, which underpin consumer and business interest rates around the world, from mortgages to corporate loans, have been rising in recent weeks. Yields rise as prices fall. Higher yields reflect investors’ concerns that lending to the government by buying its debt has become more risky.

The 30-year Treasury yield on Thursday rose as high as 5.15 percent in early trading, its highest since October 2023, before easing back later in the morning. The 30-year yield is trading about 0.7 percentage points higher than its low in April — a huge move in such a short time in that market.

Christopher J. Waller, an influential governor at the Federal Reserve, said on Thursday that financial markets were looking for more “fiscal discipline” from Washington, warning that investors are likely to continue to demand higher yields in order to hold U.S. assets.

“We ran $2 trillion deficits the last few years — this is just not sustainable, and so the markets are looking for a little more fiscal discipline,” he said in an interview with Fox Business. “They’re concerned.” [Continue reading…]