Tariff fears have subsided on Wall Street, but rocky negotiations on Capitol Hill over tax and federal budget changes could give traders a new headache in coming weeks. The massive budget bill in the House of Representatives hit a road block on Tuesday when blue state Republicans signaled that they would not support the bill without a larger deduction for state and local taxes, often referred to as "SALT." The hold out comes despite President Donald Trump personally getting involved in negotiations and signals that the GOP leadership's goal of passing the bill before Memorial Day weekend is in peril. Even if the SALT issues are ironed out — and the House and Senate eventually strike a deal — the process seems poised to result in more U.S. government debt, unless economic growth accelerates dramatically. That could potentially exacerbate the fiscal issues that contributed to the decision by Moody's Ratings to downgrade the U.S. government's credit last week, and lead to more selling in the bond market, where the 30-year Treasury yield is already near 5%. US30Y YTD mountain The 30-year U.S. Treasury yield is trading back near 5%. Yields move opposite of price. "Trump's 'one big, beautiful bill' is likely to see various amendments before it is passed in the two chambers of Congress and signed into law, but it nonetheless is expected to add trillions of dollars to the country's [$36 trillion] deficit over the next decade," Solita Marcelli, UBS global wealth management's chief investment officer Americas said in a note to clients on Tuesday. "This will likely lead to an increase in the supply of Treasury debt, exerting pressure on the bond market." Similarly, Bank of America U.S. economist Stephen Juneau said in a note to clients Tuesday that the reconciliation bill would likely add to the deficit and raises the risk of a "bond-buyer-strike." "Adding more supply to the market at a time when demand is softening could result in a spike in borrowing rates, a decline in the dollar, and a drop in equities. This could overwhelm any growth effects from the bill itself," Juneau wrote. — CNBC's Michael Bloom contributed reporting.