The 10-year yield on US Treasuries remained above 1.1% Monday morning after President-elect Joe Biden promised further economic stimulus “in the trillions of dollars” on Friday.
The yield on the benchmark 10-year Treasury bond rose to 1.103% at 7:12 a.m. ET, while the yield on the 30-year Treasury bond rose to 1.856%. Revenues move inversely with 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 took office.
The need for further stimulus was highlighted by the December job data in the US that came out Friday. It showed that nonfarm payrolls fell by 140,000 last month, against an expected increase of 50,000.
“The loss of momentum in the labor market is evident, and those who previously worked in retail, restaurants, entertainment, leisure and hospitality, as well as public sector workers in national and local governments, have paid the price,” Joe Brusuelas wrote. , chief economist at RSM.
“The main policy implication of the jobs report is pretty clear: The next round of fiscal support should address the hole in state and local budgets created by the loss of revenue, which resulted in a loss of 1.31 last year. million jobs, ”Brusuelas added.
Tom Essaye, founder of The Sevens Report, however, noted that “with all these current and anticipated stimulus measures, the risks of a disorderly acceleration in bond yields and inflation are increasing.”
“If this is the start of a sustainable movement with higher inflation, then discussions about tapering [quantitative easing] can take place much sooner than markets think, ”said Essaye.
Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, will deliver a speech Monday at 12 p.m. ET.
– CNBC’s Yun Li contributed to this report.