10-Year Treasury Yield Falls to 4.84% as Midterms Raise Prospect of Less Supply

U.S. Treasury yields fell Thursday after Democrats’ midterm victory led markets to expect limits on President Donald Trump’s tax and spending plans, potentially reducing the need for new bond issuance.

Yields across maturities declined by at least three basis points. The benchmark 10-year yield reached 4.84%, its lowest level since Sept. 10. The dollar index fell 0.2% after posting its largest one-day drop in two months during the previous session.

Allspring Global Investments’ chief fixed-income investment strategist said the market welcomed the result in part because the transfer of power was orderly and the policy agenda could become more moderate. The strategist said the federal deficit may narrow next year, which would be favorable for bond investors.

Markets expect Treasury supply could be limited if Trump has more difficulty advancing spending plans.