U.S. President-elect Donald Trump is joined by U.S. House Speaker Mike Johnson (R-LA) at the Army-Navy football game in Landover, Maryland, U.S., December 14, 2024. REUTERS/Brian Snyder

President-elect Donald Trump has put maintaining his massive 2017 tax cut at the top of his economic agenda, but there are indications that Republicans will have to pay for them with massive spending cuts to the federal budget if they want to avoid triggering major interest rate increases on American debt.

Bloomberg reports that United States treasury yields are significantly higher now than they were in 2017 when Trump's first term began, which allowed him and Republicans to pass tax cuts without making any offsetting spending cuts that could have been politically painful.

Conservatives such as Rep. Chip Roy (R-TX) have started to draw the line about ensuring the government makes major spending cuts before he signs off on any new tax cuts.

"As we speak, interest rates are going up, our debt is getting refinanced at higher interest rates, and we have more debt," Roy said recently. "The American people didn't send us here to keep racking up debt."

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Rep. Andy Barr (R-KY) expressed a similar concern during a recent meeting with fellow Republicans in which he warned that "the bond vigilantes are coming" if the United States doesn't get its debt under control.

Stephen Jen, chief executive of Eurizon SLJ Capital, said that the higher interest rates would only worsen if Trump and the GOP signaled that they simply want to pass another massive tax cut without making hard political choices about spending.

"The bond market has begun to express their discomfort, and inflation being sticky is also a warning for Trump 2.0," he explained.