U.S. Treasury yields are marching higher after the American Senate passed a $1.9-trillion coronavirus economic relief and stimulus bill over the weekend.
The 10-year U.S. Treasury yield hit 1.6% early Monday morning. The yield on the 30-year Treasury bond rose to 2.311%. Yields move inversely to prices.
Treasury yields have been moving higher recently amid expectations of economic recovery from the pandemic and concerns about a rise in inflation.
Senators passed the COVID-19 stimulus bill on the weekend through budget reconciliation, a process that required no Republican support but every Democratic vote.
The Democratic-led House aims to pass the bill this Tuesday and send it to U.S. President Joe Biden for his signature before a March 14 deadline to renew unemployment aid programs.
The rise in Treasury yields comes despite U.S. Federal Reserve Chairman Jerome Powell saying last week that “should markets become disorderly, then action would be taken to maintain favourable financial conditions and keep the economy on the path to full employment.”
Powell said at a Wall Street Journal conference last week that he was “very mindful” of the lessons from runaway inflation in the 1970s, but believes the current situation is different.
Auctions are scheduled to be held on Monday for $54 billion of 13-week bills and $51 billion of 26-week bills.