Donald Trump's shaky journey to the Middle East ended on Friday with a striking domestic reality dose as the president downgraded his credit rating, melancholy data on consumer sentiment and challenges to his flagship taxes.

Over the past two weeks, Trump has seen his approval ratings rise and the stock market rebounded strongly after suspending some of the more aggressive import tariffs he announced in early April. Labor market and inflation data are also encouraging, undermining concerns about an imminent slowdown or even recession.

But Moody's stripped the U.S. top-tier 3 A credit rating, a concern about rising levels of government debt, despite the president's Air Force travelling from Abu Dhabi to Washington.

"For those who want to tell us when to stop increasing Treasury debt, it's impossible for them to downgrade," said Michael Peterson, CEO of the Peter G Peterson Foundation.

“It is unacceptable for a great country like the United States to harm its own credit rating.”

Earlier in the day, a closely watched survey of consumer sentiment by the University of Michigan showed confidence had dropped to its second-highest level as expectations for inflation soared.

Shortly thereafter, Trump suffered a setback on Capitol Hill when the conservative hardwood of the House Budget Committee voted against his biggest domestic legislative goal: a detailed bill to expand his tax breaks enacted in 2017 and enacted deep government spending cuts.

The tricky politics comes from the multi-billion dollar economic partnership convention and investment agreement, which was signed during the presidential tour this week, the signing of the United Arab Emirates.

A buoyant Trump sees the lucrative deal as a vote of confidence in the U.S. economy, accompanied by top cabinet officials led by Elon Musk and top cabinet officials including Scott Bessent.

"This is the new industrial revolution, it is driven by Donald Trump, and it will be amazing work," Lutnik told Fox News in an interview in the UAE.

Back in Washington, Trump is counting on what he calls a "big bill" to ease some of the blows to families and businesses of the president's new tariffs and restore confidence in his economic leadership.

The fate of the tax bill is increasingly centered in Washington as Trump and Republican leaders in the House of Commons rally to approve legislation.

But on Friday, it made a lot of progress when it failed to advance in the House Budget Committee.

Ralph Norman, a South Carolina Republican, is one of the groups that oppose the bill, saying, “If we are going to continue to have…hard Americans get checks, offenders get checks, subsidies, those that shouldn’t get subsidies from their companies, I’ll go out.”

Shortly after the vote, Trump posted on X: "Republicans must unite, 'a, big beautiful Bill!'". "We don't need 'princess' in the Republican Party. Stop talking and then finish!".

Meanwhile, moderate Republicans in battlefield areas insist on more generous deductions to state and local tax payments, which is "salt", and another temptation for the president to find a way.

Even as Capitol Hill undermines the deadlock, the Fiscal Hawks warn that the impact on U.S. public finance can be disturbing.

The bipartisan group's federal budget committee warned Friday that the legislation would add $330 million to U.S. debt in a decade and risked a similar way to the 2022 UK budget crisis.

"The current fiscal situation in the U.S. is worse than that in the UK, and the deficit impact of the packaging currently under consideration is greater than that of the truss package. The market may not be very friendly to this."

Friday’s horrible consumer sentiment data were not reflected in the impact of the U.S. and China’s deal in Switzerland earlier this week to ease their trade war and lower tariffs on selling rates they slapped with each other since early April.

But Walmart, the world's largest retailer, warned this week that despite the U.S.-China détente, economists say faltering consumer sentiment still shows anxiety about Trump's trade policy remains high and that it still has to raise its store prices.

The Realclearpolitics vote average this week found that 50.1% of Americans disapprove of Trump's performance as president, while 46.1% approved it.

While the 4-percent deficit is narrower than the 7.1-percent deficit he recognized at the end of April, it is a significant drop in his 6-percent advantage released in January, which began in the second semester.

"Concerns about the inflationary impact of tariffs remain the biggest source of pessimism for consumers, even as recent talks to withdraw some tariffs have led to a substantial recovery in the stock market," Oxford Economics wrote in a note on Friday.

It added: "Consumers are also more concerned about their personal finance and expect revenue growth trends."

Other reports by George Stell