[서울=뉴스핌] Reporter Min Ji-hyun = US Treasury yields returned some of the gains in the afternoon after a remarks at a personnel hearing by Finance Minister Janet Yellen.
Janet Yellen said at a Senate hearing on the 19th (local time) that fiscal spending should be increased to avoid a protracted economic downturn.
The benchmark U.S. 10-year Treasury bond yield rose 0.2bp (1bp=0.01% points) to 1.092%. The 10-year yield, which remained at the 1.10% range in the morning of New York time, was under downward pressure after a personnel hearing by Nominee Yellen.
The 30-year Treasury bond yield rose 0.2bp to 1.839%.
The yield of 2-year Treasury bonds, particularly sensitive to policy interest rates, rose 1.2bp to 0.141%.
One-month products fell 0.4bp to 0.074%, and one-year products rose 0.8bp to 0.109%. The three-month product fell 0.4bp to 0.080%, and the three-year product rose 0.3bp to 0.204%. The 5-year product rose 0.2bp to 0.450%.
Nominee Yellen said he is open to implementing a large-scale economic stimulus plan to offset the pandemic’s economic shock, especially when interest rates are low.
“The smartest thing to do now is to act big at a time when interest rates are historically low,” said Nominee Yellen.
He acknowledged concerns about the debt burden from massive government spending, but stressed the importance of recovering from the pandemic first.
Market participants have noted the willingness of the Joe Biden administration to inject additional funds to boost the economy, which could raise inflation expectations and increase bond issuance.
One day before his inauguration date, Biden-elect announced that he would endure the deficit finances to overcome the current public health crisis.
Biden said last week that bold investments were needed to revitalize the economy and accelerate the spread of vaccines, revealing the outline of a $1.9 trillion stimulus package.
Jack Ablin, chief investment officer at Cresett Asset Management in Chicago told Reuters, “I wasn’t sure if the market would respond because Yellen’s position was known in advance.” “He said.
“There was no doubt that the nominee for Yellen would be confirmed with the finance minister. It was just a reaffirmation of what most investors already knew.”
Long-term government bond yields have recently risen with expectations of rising inflation. “Most people are expecting inflation to rise,” said Stan Shipley, macro strategist at Evercore ISI. “If Biden’s next administration’s spending plans are added, interest rates are likely to rise this year.”
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