Bond traders ditch bets on heavy stimulus in tight US Election
Live MintBond traders are abandoning bets for aggressive fiscal stimulus, with Treasury yields well off their peaks as counting for key states progresses in a tight U.S. election, ahead of a Federal Reserve policy decision. Even the U.S.’s announcement on Wednesday of record quarterly debt sales couldn’t damp the biggest one-day rally in months, with a slight tilt toward shorter-dated issuance helping flatten the yield curve. There’s just a lot unknown now.” Treasuries jumped along with most other major government bonds Wednesday as expectations for a Democratic sweep fell flat. If the economy softens, virus cases rise and Washington fails to enact stimulus, the Fed will be in a position to do more, according to Nathan Sheets, chief economist at PGIM Inc. “In that scenario, the Fed would likely respond by doing more as opposed to withholding stimulus, trying to leverage Washington,” he said.