The 10-year US Treasury yield hit 1.6% Monday morning after the Senate passed a $ 1.9 trillion economic emergency aid and stimulus bill on Saturday.
The yield on the benchmark 10-year Treasury bill rose to 1.606% at 3:30 a.m. ET. The yield on the 30-year government bond rose to 2.311%. Revenues move inversely with prices.
Senators passed the stimulus bill through budget reconciliation, a process that required no Republican support, but any Democratic vote.
The Democratic House wants to pass the bill on Tuesday and send it to President Joe Biden for signature before a March 14 deadline to revamp unemployment assistance programs.
Government bond yields have risen rapidly recently amid expectations of a post-pandemic economic recovery and concerns about a rise in inflation.
Ambrose Crofton, global market strategist at JPMorgan Asset Management, commented on Friday that this recent rise in interest rates has caused “some indigestion in the stock markets.”
Crofton, however, said investors should take comfort in the comments made by Federal Reserve Chairman Jerome Powell last week, in which he indicated that “if the markets became disorderly, action would be taken to maintain favorable financial conditions and the economy on the path to full employment ”.
Powell said at a Wall Street Journal conference last week that he was “very aware” of the lessons from the runaway inflation of the 1960s and 1970s, but believes the current situation is different.
Auctions will be held Monday for $ 54 billion in 13-week bills and $ 51 billion in 26-week bills.
CNBC’s Jacob Pramuk contributed to this report.