Ten-year U.S. Treasury yields remained above 1.1% Monday morning, after President-elect Joe Biden on Friday promised a new economic stimulus that would be “in the trillions of dollars.”
The yield on the reference 10-year treasury note rose to 1.103% at 7:12 am ET, while the yield on the 30-year treasury bond rose to 856%. Yields are reversed to prices.
Treasury yields barely moved on Monday as traders waited for more details on Biden’s stimulus plan, which will follow in a formal announcement on Thursday, six days before he takes office.
The need for additional stimulus was highlighted by U.S. job data in December that came out on Friday. It showed non-farm payrolls fell by 140,000 last month, up from a projected rise of 50,000.
“The loss of momentum in the job market is evident and those who previously worked in retail, restaurants, entertainment, leisure and hospitality, as well as public sector workers in state and local governments, have paid the price,” Joe wrote. Brussels, chief economist of RSM.
“The main political implication of the jobs report is pretty clear: the next round of tax aid should address the hole in state and local budgets opened by the loss of revenue, which resulted in a loss of 1.31 million jobs last year. ” Brusuelas added.
However, Tom Essaye, founder of The Sevens Report, noted that “with all this current and expected stimulus, the risks of a disorderly acceleration in bond yields and inflation are increasing.”
“If this is the start of a higher sustainable movement in inflation, then the volume reduction will be discussed [quantitative easing] it could happen much sooner than the markets think, ”Essaye said.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, will give a speech at 12 noon (ET) on Monday.
– CNBC’s Yun Li contributed to this report.