US yield curve is now steepest since June
|A section of the Treasury yield curve continues to steepen on strengthening hopes for additional US fiscal stimulus.
The spread between the US 10- and two-year yields has risen to 71 basis points, the highest level since June 5. The spread has widened by 12 basis points this week alone and is up more than 30 basis points from August lows.
According to Reuters, the US House Speaker Nancy Pelosi said on Thursday that negotiators were making progress in fiscal stimulus talks, and legislation could be hammered out "pretty soon."
With Democratic presidential candidate Joe Biden leading polls, the bond market looks to be pricing a surge in spending and deficit. According to Moody's analytics, Biden's spending plan would boost the total deficit to $2.6 trillion on a dynamic basis by 2030. Besides, some analysts believe Biden victory would force the Federal Reserve to hike interest rates sooner-than-expected.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.