Treasury yields fall after Democrats win House and Senate majorities
Treasury yields moved lower on Wednesday as investors weighed big wins from Democrats in the U.S. midterm elections.
Key points
- Treasury yields fell after Democrats won majorities in both the House and Senate.
- The 10-year yield dropped 3 basis points to 4.917% and the 30-year fell 4 points to 5.289%.
- JPMorgan traders said Wall Street is focused on reduced deficit spending after the midterms.
Treasury yields moved lower on Wednesday as investors assessed Democratic wins in the U.S. midterm elections. The benchmark 10-year Treasury note yield fell 3 basis points to 4.917%, while the 30-year bond yield slid 4 basis points to 5.289%. The shorter-term 2-year note yield declined marginally to 4.606%.
Democrats obtained majorities in both the House and Senate, and are projected to win at least 250 House seats and at least 54 Senate seats. The party flipped Senate seats from Republicans in Iowa, Kansas, North Carolina, Ohio, South Carolina, Maine and Texas, and also won key gubernatorial races in Ohio and Texas.
Pressure on spending
According to the article, the Democratic victory could rein in government spending from the Trump administration, as it makes it harder for the White House to push legislation through Congress.
Traders at JPMorgan said one issue Wall Street is focusing on after the midterms is "reduced deficit spending." They said this could be achieved by asserting power over the budget and likely wading through a government shutdown.
This can be achieved by asserting power over the budget and likely wading through a government shutdown
— JPMorgan traders
