The bond market is stuck in a tug of war, which is the prospect of a growth-promoting stimulus from President Trump’s comprehensive tax bill and tariffs, leaving investors with little clear signal to the direction of the economy and rising long-term yields.

"On the one hand, we have policies on one hand, and on the other hand, will promote growth, such as broad fiscal stimulus," Kathy Jones, chief fixed income strategist at Charles Schwab, told Yahoo Finance. "Then we have some that will slow down growth, such as tariffs. … So the bond market is just falling into the middle."

As of Tuesday, the 30-year fiscal yield (^TYX) hovered at a position that is still at 4.96% of the 4.96% position, more than 20 basis points since the beginning of the year. Meanwhile, 10-year yield (^TNX) trades about 4.44%.

Long-term yields have risen in recent weeks due to concerns about the U.S. fiscal trajectory, concerns about Trump’s tax legislation, with an estimated $4 trillion in national debt added over the next decade, and will head to the Senate after clearing the house. Trump vowed to sign the bill as a bill by July 4.

"We haven't seen this in decades," Jones said. The recent turn of the bond market to "a lot of worry and uncertainty."

Although the Fed is expected to keep interest rates unchanged, short-term yields remain stable, long-term yields are getting bigger as investors demand compensation for increased losses and intensified policy risks.

Read more: What are bonds and how do you invest in them?

Historically, the deficit had little effect on the yields of the treasury, mainly due to the US's economic advantages and its role as an issuer of the world's reserve currency. But this dynamic may be shifting.

"It feels like we're reaching a turning point," Jones said.

In addition to pressure, provisions in the proposed legislation, such as Section 899, may increase the expenses for foreign investors to hold U.S. assets. Jones warned that this could undermine important demand for the Treasury.

“Whether it is direct investment or through financial instruments, anything that discourages foreign investment in any way, shape or form will be negative,” Jones said. “We often have large current account deficits. We need capital inflows. If we don’t understand, this will dampen our economy, which means that yields must rise to levels that foreign investors think they are attractive.”