The passage of a sprawling budget bill has raised concerns over the long-term debt of the United States, which analysts said could compound already heightened worries over the reliability of the country’s currency as a safe-haven asset.

Winning a narrow 218-214 vote in the House of Representatives on Thursday, the “One Big Beautiful Bill Act” – whichraises spending on border security and defence while making the record tax cuts enacted in 2017 permanent – now heads to US President Donald Trump for his signature, which he is expected to give on Friday.

It is also set to raise the federal government’s debt ceiling by US$5 trillion, surpassing the US$4 trillion allocated by an earlier version of the bill. This creates more room for the Treasury Department to borrow to repay future obligations, but allows for greater debt accrual in the future.

Raymond Yeung, chief Greater China economist at ANZ, said while the bill may lower the immediate risk of a government default, it alsodeepens worries over US debt sustainability and the interest rate structure.

“In the months leading up to the bill’s passage, investors had already been discussing how to diversify risk and reduce their exposure to US dollar assets,” he said.