Investors sold off Treasuries, with the yield on the 10-year note spiking to over 0.97%, some 15 basis points higher than the 0.821% hit late Friday, before retreating to about 0.96%.
The 30-year bond yield likewise rose 15 bps to 1.75%.
The spike in the yield—bond prices move inversely to yields—more than made up for dimmer prospects for fiscal stimulus after the mixed result from the US election.
There was talk of a “vaccine moment” and speculation that widespread availability of a vaccine next year might make the Federal Reserve revise its timeline for interest-rate changes.
The immediate question is how long this vaccine moment will last. The results are preliminary and it will still take months to make a vaccine widely available, even with an expedited approval process. The current resurgence of infections could make that wait seem long.
The likelihood is that Treasuries will remain volatile, as the election news already roiled markets. The failure of a “blue wave” to materialize in the form of a Democratic sweep sent the 10-year yield plunging to near 0.70% from over 0.90% on optimistic bets that Democrats would be able to push through a stimulus of trillions of dollars.
An effective vaccine would significantly improve the economic
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