U.S. Treasury Yields Slip in Holiday-Shortened Session

U.S. government-bond yields fell Thursday as Wall Street winds downs in a shortened trading session.

The yield on the benchmark 10-year Treasury closed at 0.933%, down from 0.953% on Wednesday, according to Tradeweb. The yield on the 30-year bond fell to 1.669%, compared with 1.697%, where it closed during the previous session.

The bond market closes at 2 p.m. ET Thursday and is shut Friday for the Christmas holiday.

Yields, which fall as bond prices rise, declined after the European Union struck a trade deal with the U.K., ending more than four years of uncertainty between the two major U.S. allies. But the price action was minimal and mirrored a similar drop earlier this week, when investors shrugged off new stimulus measures as Congress passed a $900 billion Covid-19 aid bill that includes direct payments to households, aid to businesses and more. The fate of that package is now unclear following criticism from President Trump.

Investors are tracking the latest developments on a new coronavirus aid package. The Capitol building.


alex edelman/Agence France-Presse/Getty Images

Government-bond yields have largely been stuck in a range, pinned by the Federal Reserve’s efforts to stimulate the economy and investor uncertainty around when a vaccine-fueled rebound will take place.

Hopes for an end to the coronavirus crisis drove yields to multimonth highs in November, when pharmaceutical companies announced successful vaccine trials.

The 10-year yield, a barometer for financial markets, has since been unable to break through the symbolic 1% level. It usually rises when investors are feeling optimistic about growth and inflation, or falls when their outlook dims. U.S. government bonds have rarely been in greater demand than during this year’s pandemic-fueled market turmoil, which pushed yields lower as investors sought safe assets and the Fed intervened to stabilize fixed-income markets. The 10-year yield now closed nearly a percentage point lower from this time last year, when it traded at 1.909%.

A surge in Covid cases around the globe and signs of weakening economic data have put a damper on investor expectations, keeping them in ultrasafe government debt. While most analysts at Wall Street banks expect significant improvement in the economy during 2021, they anticipate weak data for the next several months as Covid-related restrictions take a toll on the economy.

U.S. household spending dropped for the first time in seven months, the Commerce Department said Wednesday, with consumers cutting spending by 0.4%. The weaker-than-expected data comes a week after U.S. retail sales—a measure of how much Americans spend on cars, groceries, gasoline and other goods—fell 1.1% in November.

Write to Julia-Ambra Verlaine at [email protected]

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