Huge spending pushes up yields
While the world is trying to 'flatten the curve' on coronavirus cases, the bond market curve is steepening. 2s3-s are up 22 basis points today.
A big part of the reason is the debt issuance numbers that are coming. The US is looking at a +$3 trillion deficit this year. It was running around $1 trillion before the virus, Mnuchin is talking about $1.2 trillion stimulus and then there's the drop in revenue and other bailouts. At this point $3 trillion is probably conservative. That's a lot of bond issuance.
At the same time, you could argue that the bond market is signaling better times. The bond market was way ahead of stocks in this crisis so that could be the case again.
Here's a look at the 10-year:
A lot of people are struggling for answers:
