Daily Market Color

Treasury Yields Continue to Rise After Senate Passes Stimulus Bill

Bond selloff extends into its sixth week
Following the Senate vote over the weekend, Treasury yields and swap rates rose 1-6 bps across the curve today.  The 10-year UST yield closed 2 bps higher at 1.59%, a one-year high.  The selloff sparked a rise in the dollar index, which jumped to a three-month high.  Major US equity indices ended higher – the S&P 500 rose 0.2% while the DJIA climbed 1.5% to a record high.  Meanwhile, the Nasdaq dropped 2.4% after technology stocks continued to decline.
Senate passes $1.9 trillion stimulus bill
After multiple amendments for unemployment benefits and re-opening schools, the Senate passed the COVID relief bill on Saturday afternoon.  The House will likely cast their final vote on Wednesday, and President Biden is expected to sign it soon after.
Treasury Secretary Janet Yellen forecasts full employment by 2022
In her interview this morning, Yellen commented the stimulus funds will “really fuel a very strong economic recovery.”  Addressing the recent rise in interest rates, Yellen still believes the stimulus funds will not cause high levels of inflation, adding, “We had a three-and-a-half percent unemployment rate before the pandemic and there was no sign of inflation increasing. It was too low rather than too high.”
CDC releases new COVID-19 guidelines
Today, the CDC announced that people who have received all necessary vaccine doses are able to gather without social distancing or masks.  Over 18% of the US population have gotten at least one vaccine dose and nearly 10% have been fully vaccinated.  Total virus cases have topped 117 million while fatalities are nearing 2.62 million.

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