Bond market rallies as divided Congress raises fiscal concerns

Democrats win Senate control

Voters rejected Republicans in midterms, electing 54 Democrats and 44 Republicans to the Senate. Consumers want action on affordability and inflation.

Bond yields fall as investors seek safety

Longer-dated Treasury yields dropped sharply. Thirty year Treasuries fell below five point three percent, while ten year bonds pushed toward four point nine percent.

Fiscal gridlock likely under divided government

UBS's Paul Donovan told clients that a more divided Congress increases the likelihood of government standoffs over spending. Fiscal gridlock seems the likely default.

“Fiscal gridlock seems the likely default.”

Gridlock may ease debt concerns

Federal deficits run between six and seven percent of GDP, with interest payments on national debt exceeding one trillion dollars yearly. Spending gridlock could slow new bills.

Shutdown risk rises before December deadline

Federal government funding runs out December eleven and requires bipartisan support to prevent shutdown. Odds of shutdown jumped to forty five percent on prediction market Kalshi.