Wall Street Journal reported that during Wednesday Asian trading US Treasury
yields fell across the curve. Tradeweb data showed the two-year yield reached an
intraday low of 4.546% — a two-month trough — before trading at 4.604%, down
0.8bps. The 10-year yield slipped 1.5bps to 4.934%. Elisabet Kopelman, a US
economist and Fed watcher at a Swedish bank, said in a note she expects the
change in congressional control would make fiscal policy modestly more
expansionary while also making it harder to pass large-scale spending measures
such as Trump’s $1.5trln Pentagon request. Given already-unsustainable US budget
deficits, she added this outcome is not necessarily negative for bonds but is
unlikely to produce durable fiscal repair; neither party, including the
president, appears focused on deficit reduction.
