U.S. Treasury Yields Climb on Renewed Coronavirus Stimulus Talksm -- Update
December 01 2020 - 4:34PM
Dow Jones News
By Sebastian Pellejero
U.S. government-bond yields climbed to a three-week high Tuesday
following a renewed congressional effort to send aid to businesses
and municipalities hurt by the coronavirus pandemic.
The yield on the benchmark 10-year Treasury note finished the
session at 0.933%, up from 0.845% Monday and its highest close
since Nov. 10, according to Tradeweb. The 30-year Treasury bond
yield rose to 1.675%, from 1.574%
Yields, which rise when bond prices fall, rose after a
bipartisan group of U.S. lawmakers proposed a $908 billion relief
bill that would fund measures through the end of March. House
Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven
Mnuchin planned to speak about relief efforts Tuesday afternoon.
Higher government spending tends to push up Treasury yields by
boosting economic growth and inflation, making fixed payments from
bonds less attractive to investors.
Previous stimulus efforts had pegged potential packages at more
than $1 trillion. In November, the Treasury Department dialed back
its estimates for government borrowing through the end of the
year.
Yields have climbed in recent sessions, boosted by hopes for a
coronavirus vaccine, though they remain near historic lows. One
factor suppressing a rebound is the Federal Reserve, which has
committed to aiding the economy by holding borrowing costs low:
keeping short-term interest rates near zero and buying up billions
of dollars of bonds.
Adding to pressure on yields Tuesday, new manufacturing data
from the Institute of Supply Management came in at 57.5 for
November, below expectations from economists polled by The Wall
Street Journal.
Write to Sebastian Pellejero at sebastian.pellejero@wsj.com
(END) Dow Jones Newswires
December 01, 2020 16:19 ET (21:19 GMT)
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