Stock and bond markets are sitting on a knife’s edge of doubt over the Trump administration’s tariffs and the impact of Congress’ budget bill on the federal deficit. Bond-rating agency Moody’s last week downgraded America’s credit worthiness.

Stock markets in Europe and the United States dropped on Friday after President Trump threatened the European Union and Apple with steep tariffs.

Demand for the bonds was the lowest since February, according to the Treasury Department.

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 generati...