US government-bond yields have declined sharply, reflecting traders’ bets that Tuesday’s election would result in much higher than small economic stimulus efforts.
Although the votes were being counted, the returns suggested a very good chance that Republicans would retain control of the Senate, even as Joe Biden defeated President Trump to take over the White House, investors and analysts said. He said that this result would likely result in less spending on epidemic relief and infrastructure projects than the democratic takeover of the Upper House, with pre-election elections suggesting that there was a strong possibility.
Investors and economists pay attention to long-term treasury yields as they help determine lending costs in the economy. Earlier this year, yields were lowered as the coronovirus epidemic caused major economic disruption and the Federal Reserve slashed interest rates in an effort to limit losses.
In recent months, ultralow yields have helped fuel demand for risky assets such as stocks and increased borrowing by companies, while homeowners rush to refinance their mortgages.
The yield on the benchmark 10-year US Treasury note closed at 0.768%. It was down 0.881% on Tuesday at the end of normal US trading hours – marking its biggest one-day decline since April – and 0.942% just as earlier election results were reported later in the evening. .