Thursday — Investors, expecting a Democratic sweep and tighter fiscal restraint
that would favor bonds, pushed long-dated U.S. Treasury yields to eight-week
lows, Tradeweb data showed. The 10-year and 30-year yields hit intraday lows of
4.837% and 5.229%, respectively, before ticking up slightly but finishing lower
on the day. Two-year yields, which fell to a two-month low on Wednesday, were
trading just above that level. MissionSquare CIO Shari Hensrud said a split
Congress could be supportive for bonds but would not solve the fiscal deficit; a
reduction in fiscal risk could underpin long treasuries and exert downward
pressure on long-term yields, while short-term yields remain more dependent on
Fed policy, inflation and labor-market conditions.
