U.S. Treasuries rose on Wednesday as investors priced in constrained federal spending and political gridlock amid expectations Democrats may sweep Congress. Market participants also flagged the prospect that tighter AI regulation could slow growth and lessen the need for further Fed rate hikes. Equity weakness boosted safe-haven flows into bonds. Analysts said markets were relieved the probability of former President Trump’s earlier pledge to pay $5,000 to each U.S. adult — a plan amounting to a

U.S. Treasuries rose on Wednesday as investors priced in constrained federal spending and political gridlock amid expectations Democrats may sweep Congress. Market participants also flagged the prospect that tighter AI regulation could slow growth and lessen the need for further Fed rate hikes. Equity weakness boosted safe-haven flows into bonds. Analysts said markets were relieved the probability of former President Trump’s earlier pledge to pay $5,000 to each U.S. adult — a plan amounting to about $1.2 trillion, roughly 16% of the federal budget — has diminished. Barrenjoey chief rates strategist Andrew Lilly said markets had previously assigned roughly a 5% chance to that scenario; he added that the risk has now disappeared and implementation would have provoked a catastrophic reaction in the Treasury market.