FX.co ★ US 10-Year Yield Holds Up on Fiscal Worries

The yield on the US 10-year Treasury note remained just below 4.6% on Thursday, close to its highest point in over three months, as investors assessed the implications of increasing fiscal risks and waning interest in recent bond auctions. Concerns have grown following President Trump's proposed budget, which includes extensive tax cuts and is expected to increase the national debt by over $3 trillion. The anticipation of a substantially larger deficit has raised alarms about potential financial instability and has affected investor confidence in US government securities. Blue-state Republicans have expressed their opposition to the bill unless it incorporates a greater deduction for state and local taxes. Further contributing to the market's anxieties, a lackluster auction of 20-year Treasuries on Wednesday reflected weak demand, underscoring the notion that investors may be withdrawing from US assets. Market participants are now focusing on Thursday's release of the weekly jobless claims report for additional insights into the labor market.