US 10-year Treasury passes 1% first time in 10 months

By Ovunc Kutlu

ANKARA (AA) - US 10-year Treasury yield on Wednesday has climbed above 1% for the first time since March 2020 as investors believe the Democratic Party will manage to take control of the Senate.

The yield on the benchmark 10-year Treasury note, which is a debt obligation issued by the US government with a maturity of 10 years and pays interest every six months, climbed as high as 1.036% before 0800 EDT (1300GMT).

For the first time in the US history, that yield had fallen below the level of 1% in March 2020 and remained below that since then as the novel coronavirus pandemic struck the world and stalled the world's largest economy.

The Democratic Party on Wednesday was heading to gain control of the US Senate with two runoff elections in the state of Georgia to hold 50 seats in the upper chamber as tiebreaking vote will belong to Democrat Vice President-elect Kamala Harris in the Joe Biden administration.

Investors took the runoff elections result as a clear sign that a blue wave, in which Democrats gain control of both the Congress and the White House, would pave the way for easier adoption of higher relief bills and larger stimulus packages throughout 2021 to revive the US economy.

With high expectations of larger liquidity to be injected into the US economy, the American dollar index, which is indexed to a basket of six currencies including euro, Japanese yen and Pound sterling, also plummeted.

The US dollar index fell to as low as $89.21 -- its lowest point since March 2018.