Vote-a-rama drags on as markets eye U.S. debt and policy risk
The U.S. Senate remains embroiled in a marathon session—dubbed “vote-a-rama”—as Republicans push to pass President Donald Trump’s sweeping tax and spending bill. The measure, estimated to add $3.3 trillion to the national debt, is generating concern across global financial markets.
While the Senate struggles to unite on amendments, the U.S. dollar has fallen to four-year lows against the euro, reflecting investor unease over Washington’s growing fiscal deficits. Despite market volatility, bond yields have remained surprisingly stable, raising questions about where the so-called “bond vigilantes” have gone.
Debt burden and uncertainty weigh on sentiment
The latest assessment by the Congressional Budget Office puts the Senate bill’s impact at $800 billion more than the House’s version. With the national debt already at $36.2 trillion, investors are watching closely for signs that long-term fiscal discipline may erode further.
At the same time, President Trump has floated cutting subsidies to companies like Tesla in an effort to trim federal spending, while expressing growing frustration with the pace of U.S.-Japan trade talks. Treasury Secretary Scott Bessent warned that countries could soon be notified of sharply higher tariffs if trade deals aren’t finalized by the July 9 deadline.
Markets juggle inflation and interest rate outlook
Despite the fiscal noise, bond markets remain calm. Analysts suggest that focus has shifted back to inflation and the likelihood of Federal Reserve rate cuts coming sooner than expected. Softening economic indicators and weak hiring data are reinforcing expectations that the Fed may act by September.
Still, the dollar’s weakness is a stark reminder of investor nervousness. Stephen Jen of Eurizon SLJ Asset Management has argued that beyond the much-discussed “Trump put” for equities, markets may now be experiencing a kind of “Treasury put,” where fiscal expansion is being used to backstop financial stability—at the cost of a ballooning deficit.
Energy and emissions also in focus
Meanwhile, U.S. power sector emissions have already hit a three-year high, with Reuters columnist Gavin Maguire warning that emissions are likely to climb further. The cost of Trump’s fiscal ambitions, it seems, extends well beyond the budget ledger.
As vote-a-rama continues, market participants will be watching for clues about the Senate’s next moves, the fate of tariffs, and the direction of U.S. monetary policy.
