By Sebastian Pellejero
U.S. government-bond yields climbed Tuesday following a renewed Congressional effort to send aid to businesses and municipalities hurt by the coronavirus pandemic.
The yield on the benchmark 10-year Treasury note recently traded around 0.916%, according to Tradeweb, up from 0.845% at Monday's close. That puts the yield on pace for its highest close since Nov. 10.
The 30-year Treasury bond yield followed a similar path, trading recently around 1.657%, up from 1.574% Monday.
Yields, which rise when bond prices fall, rose after a bipartisan group of U.S. lawmakers proposed a $908 billion relief bill that would fund measures through the end of March. House Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven Mnuchin planned to speak about relief efforts Tuesday afternoon.
Higher government spending tends to push up Treasury yields by boosting economic growth and inflation, making fixed payments from bonds less attractive to investors
Previous stimulus efforts had pegged potential packages at more than $1 trillion. In November, the Treasury Department dialed back its estimates for government borrowing through the end of the year.
Yields have climbed in recent sessions, boosted by hopes for a coronavirus vaccine, though they remain near historic lows. One factor suppressing a rebound is the Federal Reserve, which has committed to aiding the economy by holding borrowing costs low: keeping short-term interest rates near zero and buying up billions of dollars of bonds.
Adding to pressure on yields Tuesday, new manufacturing data from the Institute of Supply Management came in at 57.5 for November, below expectations from economists polled by The Wall Street Journal.
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(END) Dow Jones Newswires