10-year Treasury yield climbs above 1.1% to start the week

The 10-year U.S. Treasury yield jumped above 1.1% on Monday, extending its recent advance on bets that more Covid-19 stimulus is coming.

The yield on the benchmark 10-year Treasury note rose 2 basis points to 1.132%, while the yield on the 30-year Treasury bond climbed 2 basis points to 1.892%. Yields move inversely to prices.


President-elect Joe Biden on Friday promised further economic stimulus that would be "in the trillions of dollars." Details about his stimulus plan will follow in a formal announcement on Thursday, six days before he is slated to take office.

The need for further stimulus was highlighted by U.S. December jobs data which came out Friday. It showed that nonfarm payrolls fell by 140,000 last month, against an expected rise of 50,000.

"The loss of momentum in the labor market is clear, and those who previously worked in retail, restaurants, entertainment, leisure and hospitality, as well as public sector workers in state and local governments, have paid the price," wrote Joe Brusuelas, chief economist at RSM.

"The major policy implication of the jobs report is quite clear: The next round of fiscal aid needs to address the hole in state and local budgets blown open by the loss of revenues, which resulted in a loss of 1.31 million jobs last year," Brusuelas added.

However, Tom Essaye, founder of The Sevens Report, noted that "with all this current and expected stimulus, the risks of a disorderly acceleration in bond yields and inflation are going up."

"If this is the start of a sustainable move higher in inflation, then discussions about tapering [quantitative easing] might occur a lot sooner than markets think," Essaye said.

Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, is due to make a speech at 12 p.m. ET on Monday.