FX.co ★ US 10-Year Treasury Yield at 3-Month High

The yield on the US 10-year Treasury note rebounded from early losses on Thursday, rising above 4.6%—a level not seen in three months—after the House narrowly passed President Trump's new tax bill. The legislation, anticipated to go before the Senate for a vote by August, is expected to add nearly $3 billion to the budget deficit over the next ten years and includes a $4 trillion increase in the US debt ceiling. This has heightened concerns about the country’s fiscal health, particularly in light of Moody’s recent downgrade of the US credit rating to Aa1, which pointed to increasing government debt and a growing deficit. These issues, combined with generally weak economic indicators and stalled trade negotiations, have driven investors to retreat from US assets. This cautious stance among investors was further underscored by the tepid demand in a 20-year Treasury auction on Wednesday.