Republican budget hawks got steamrolled this week as the House passed a bill to advance President Trump's agenda, sending concerns though financial markets about permanently higher U.S. deficit levels.

Following the pandemic, the U.S. national debt ratcheted up to a new plateau of around 120 percent of gross domestic product (GDP) after the government sent out trillions in stimulus to bolster the economy — an amount that contributed to inflation and drew Republican outrage.

But spending reductions in Trump's “big, beautiful bill” lost out to pressures from the moderate Republican caucus and the president, resetting expectations for the path of the national debt and the interest payments that will be needed to pay for it.

The international market for U.S. debt has wobbled in the aftermath of the House passage of the bill, with the yield on the 20-year and 30-year bonds spiking above 5.1 percent on Thursday

The bill has made the financial world woozy. Credit rating agency Moody’s, the last major credit rater to preserve triple-A status for U.S. sovereign debt, dropped its rating down to double-A last Friday after the Joint Committee on Taxation (JCT) put out cost estimates for the tax portion of the bill.

Moody’s sees U.S. debt reaching about 9 percent of GDP by 2035, up from 6.4 percent in 2024, mainly as a result of interest payments, spending on public programs, and “relatively low revenue generation.”

The Dow Jones Industrial Average and the Standard and Poor’s 500 index have both lost around 2 percent of their value on the week.

“The markets are watching the fiscal policy … the bill being put........

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