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U.S. government debt prices rose slightly on Wednesday as investors monitored stalls on both a federal stimulus package and Covid-19 vaccine and treatment trials.
The 10-year Treasury yield slipped to 0.7%. The 30-year bond rate dipped to 1.48%. Yields move inversely to prices.
“The market’s biggest worry is Washington as it relates to uncertainty surrounding fiscal stimulus,” said Roderick von Lipsey, managing director, UBS Private Wealth Management. “With the political tug-of-war over a stimulus package, the markets are waiting to see how much and when.”
Democrats and Republicans remain at odds over the size and scope of a potential coronavirus relief bill, with House Speaker Nancy Pelosi saying Tuesday that a $1.8 trillion package proposed by the White House “falls significantly short.”
Senate Majority Leader Mitch McConnell said Tuesday that the Senate will vote on a limited stimulus bill later this month.
On Wednesday, Treasury Secretary Steven Mnuchin said that getting a deal done before the election would be difficult, adding that both sides were still far apart on certain issues. He also noted, however, that Democrats and Republicans are making progress in some areas.
Some headwinds for risk-on sentiment arose after Eli Lilly said Tuesday afternoon that it would pause its trial of a coronavirus antibody treatment. This followed Johnson & Johnson‘s earlier announcement that it halted its vaccine trial after an “adverse event” was reported.
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