We recently took a look at the impact of the One Big Beautiful Bill Act (OBBBA) on the federal deficit. Download a high resolution PDF with key takeaways.
Key Takeaways
- The One Big Beautiful Bill Act (OBBBA) was passed in Congress on July 3, 2025, and signed into law on July 4, 2025.
- The Congressional Budget Office (CBO) estimates that the bill will add $3.3 trillion to the Federal Deficit over the next decade.
- Bond markets have shown signs of caution as the bill progressed through Congress, especially longer maturity bonds.
- Short-term treasury yields remained relatively calm, however longer-term Treasury yields drifted higher coincident with fiscal concerns related to tariffs and the budget bill.
- Credit spreads also widened before the Federal reserve stepped in to help ease concerns.
- We’ve often pointed to fixed income and credit markets as the best lens for interpreting today’s unusual policy mix. That mix is increasingly defined by near-record fiscal deficits, which have helped support growth and risk assets in the past but may not in the future.
- OBBBA does raise the federal debt limit, which we hope gives the government time to work to stabilize the long-term debt situation.
- In the meantime, we believe investors should be prepared for a wide range of outcomes and consider new ways to diversify asset allocations and investment portfolios.
CBO, J.P.Morgan Asset Management, BEA, Treasury Department Estimates are from the Congressional Budget Office (CBO) January 2025 An Update to the Budget Outlook: 2025 to 2035. *Adjusted by JPMAM to include estimates from the CBO June 2025 report “Estimated Budgetary Effects of an Amendment in the Nature of a Substitute to H.R. 1, the One Big Beautiful Bill Act.
The opinions and analyses expressed in this presentation are based on Curi Capital, LLC’s (“Curi Capital”) research and professional experience are expressed as of the date of our mailing of this presentation. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is it intended to speak to any future time periods. Curi Capital makes no warranty or representation, express or implied, nor does Curi Capital accept any liability, with respect to the information and data set forth herein, and Curi Capital specifically disclaims any duty to update any of the information and data contained in this presentation. The information and data in this presentation does not constitute legal, tax, accounting, investment or other professional advice. An investment cannot be made directly in an index. The index data assumes reinvestment of all income and does not bear fees, taxes, or transaction costs.
