Two-year Treasury yield hits two-month low as Democrats sweep midterms

The two-year Treasury yield fell to 4.546%, a two-month low, in Asian trading Wednesday before recovering to 4.604%, down 0.8 basis point, according to Tradeweb. The move came as early U.S. midterm results showed a Democratic sweep, with voters stripping Republicans of congressional control amid frustration over the economy. The 10-year yield fell 1.5 basis points to 4.934%. SEB economist Elisabet Kopelman said a shift in congressional power could lead to slightly more expansionary fiscal policy while closing the door to major spending pushes such as President Trump's $1.5 trillion Pentagon budget request. She said that is not bad for bond markets given unsustainable deficits, but not enough for a sustainable improvement, and neither party nor the president appears focused on the deficit.