The US Treasury’s ten-year yield reached 1.6% on Monday morning after the Senate passed a $ 1.9 trillion economic stimulus and relief bill for the coronavirus on Saturday.
The yield on the 10-year reference Treasury note rose to 1.606% at 3:30 ET. Yield on 30-year Treasury bills rose to 2.311%. Yields move inversely to prices.
Senators approved the stimulus bill through budgetary reconciliation, a process that did not require Republican support, but rather all Democratic votes.
The Democratic-controlled House plans to approve the bill on Tuesday and send it to President Joe Biden for his signature before the March 14 deadline to renew unemployment benefits.
Treasury yields have been rising rapidly recently amid expectations of an economic recovery from the pandemic and concerns about rising inflation.
Ambrose Crofton, global market strategist at JPMorgan Asset Management, noted in a comment on Friday that this recent rise in yields has caused “some indigestion in the stock markets”.
However, Crofton said investors should take comfort in the comments made by Federal Reserve Chairman Jerome Powell last week, indicating that “if markets become disordered, actions will be taken to maintain favorable financial conditions and keep the economy on the road to full employment “.
Powell said at a Wall Street Journal conference last week that he was “very attentive” to the lessons of rampant inflation in the 1960s and 1970s, but believes the current situation is different.
The auctions will be held on Monday for $ 54 billion in 13-week accounts and $ 51 billion in 26-week accounts.
– Jacob Pramuk of CNBC contributed to this report.