As the US Senate began voting Monday on President Donald Trump’s controversial tax and spending bill, Nigel Green, CEO of global financial advisory giant deVere Group warned that the legislation that could dramatically increase America’s debt burden and reignite inflation.

The legislation extends Trump-era tax cuts and significantly increases military and border spending while slashing funding for healthcare and social programmes.

Independent forecasts now estimate the move will add at least $1.2tr to the federal deficit over the next decade, pushing the US debt-to-GDP ratio above 130%.

According to him, the “bill is economically reckless and globally dangerous. If it passes, we will see an immediate escalation in US borrowing needs and upward pressure on inflation. The consequences for the US and the wider global economy will be severe.”

Green argued that “America’s debt trajectory is already one of the steepest in the developed world.

“This bill accelerates it. More government borrowing means more Treasury issuance, higher yields, and higher borrowing costs across the board for businesses, homeowners, and consumers.”

Yields on 10-year US Treasuries are already trading near their highest levels since 2022. The Congressional Budget Office has warned that interest costs on the national debt will become one of the largest single line-items in the federal budget if this legislation passes.

“Investors will, rightly, demand higher returns for holding US debt, which means higher interest rates at every level of the economy,” he says.

“This increases mortgage costs, corporate borrowing expenses, and reduces consumer and business investment. It’s a direct threat to US growth and jobs.”

Beyond debt, the inflationary risks are mounting. With inflation still running above the Federal Reserve’s 2% target, and core inflation proving sticky, adding this level of fiscal stimulus will likely push prices higher again.

“This bill throws more fuel on an inflation fire that isn’t fully under control,” says Nigel Green.

“You don’t stimulate an already overheated economy with unfunded tax cuts and massive new spending commitments. This will make the Fed’s job harder, forcing them to either delay rate cuts or even resume tightening. That’s bad for financial markets and bad for consumers.”

The global fallout could be widespread. The US dollar edged lower in early trading today on growing market concern over the bill’s fiscal impact. Credit rating agencies, already warning about America’s fiscal trajectory, may soon act.

“If the US suffers another downgrade, as it did with Fitch in 2023, global markets will respond sharply,” notes the deVere CEO.

“US Treasuries sit at the heart of the global financial system. Any loss of confidence in US creditworthiness sends shockwaves through currencies, equities, and fixed income markets worldwide.”

Emerging markets face particular risk as rising US yields could trigger capital flight, increase external debt costs, and pressure currencies.

“This is a global risk event in the making,” adds Nigel Green.

“Policymakers in Washington are playing with fire. The scale of additional borrowing will export volatility to every major asset class and economy.”

Nigel Green says investors must brace for the impact.

“This isn’t just a US problem—it’s a global economic threat,” he concludes. “Every investor, institution, and government should be preparing now for the financial consequences of this bill.”