Why Bond Yields Are Rising After Trumps Victory

There is an adage in markets that stock investors are optimists and bond investors are pessimists.As the ticker tape adjusted on Wednesday to Donald J.Trump’s victory, stocks soared in a sign of bullish enthusiasm for his policies of tax cuts, deregulation and stimulative government spending (as well as relief that the election had concluded with a clear winner).Those same policies, however, have been met with unease among bond investors, who fret about government largess and the resurgence of inflation under the president-elect.That concern has been reflected in rising yields on government bonds, which means investors expect to be paid more in interest in exchange for lending to the government.Those began to climb weeks ago, as investors anticipated a Trump win, and on Wednesday the yield on 10-year Treasury notes jumped as much 0.2 percentage points, a huge move in that market.

It now stands at 4.35 percent, up from around 3.8 percent at the start of October.But hang on.Isn’t the Fed cutting interest rates? And aren’t yields just something for farmers to worry about?Treasury yields, which have been rising, are like the market’s interest rates.A farmer’s yield is the amount of a crop they manage to harvest once it has been planted and nurtured.

It’s a reward for the farmer’s work.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....