Bond Markets Get Swept Up Over a Possible November 5th Clean Sweep
Bond markets are reacting to a potential GOP sweep
Since June 25th, the 10-year T-note yield has spiked +25 basis points and most of the backup was since the debate last Thursday. Even in the face of a benign PCE and core deflator report, a set of squishy-soft economic data releases, and downgrades to Q2 real GDP growth to very low single-digits. This is all about bond investors beginning to price in the possibility that not only will Donald Trump emerge victorious but that the GOP will take the House and Senate too. Shades of what happened after the 2016 election, except for the fact that Trump’s win was a surprise, and this time around, there are more than three months to go before the vote. But markets have this tendency to shoot first and then answer questions later.
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