The US fiscal deficit is ballooning at an alarming pace as Donald Trump's tax cuts eviscerate federal revenues, forcing Washington to borrow epic sums on the global bond market at an increasingly delicate juncture.

The US Treasury revealed this week that it expects to issue $769bn (£590bn) of new debt in the second half of the year, far higher than expected just months ago.

The surge in borrowing comes just as the Federal Reserve raises the pace of bond sales to $50bn a month under its policy of quantitative tightening, effectively flooding the Treasury market with supply.

Reduced stimulus from the European Central Bank and the Bank of Japan is slowly drying up what has until now been an almost inexhaustible source of easy money.

The US Treasury said the budget deficit this fiscal year will top $833bn. It is on track to blow through $1 trillion by 2020 – nearing 5.5pc of GDP – as the full effects of tax cuts combine with extra spending on infrastructure, pork barrel projects by Congress, and military rearmament.