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The U.S. Treasury yields increase volatility caused by coronavirus panic as the number of confirmed cases in the country is growing.
The coronavirus outbreak in the United States has now reached a red alert level after surpassing 1,000 cases and over 30 deaths. As a result, it has affected the treasury yields which is the return on investment on the government’s debt obligation. However, the United States government debt prices rose on Wednesday, after investors had hoped on imminent fiscal spending in order to offset the current impact of COVID-19 outbreak.
At the time of writing the 10-year Treasury note, which is considered to move directly inverse to price, had climbed above the day’s low to hit 0.7100%. On the other hand, the 30-year Treasury bond was 1.1660% lower.
Most stock markets led by the Dow Jones Industrial Average have begun to recover from the free fall that was caused by the sudden fall of crude oil prices. However, as the two major oil producers, Russia and Saudi Arabia, gave a clue of talks on having a common ground, the stock market on average is not only stabilizing but also recovering slowly.
According to CNBC, a White House official confirmed that the president had pitched a 0% payroll tax rate for both employers and employees for the remaining part of the year. This will be an addition of the $8.3 billion spending package that the president signed in the previous week to help in combating the spread of the deadly coronavirus.
Coronavirus Continue Being a Threat to the Treasury Yields and Markets at Large
According to Johns Hopkins University data, coronavirus is now in at least 35 states pushing the confirmed numbers to over 1,000. As the virus continues sweeping across the country, a number of State governors have resulted in announcing a state of emergency to control the spread and more impact of the disease.
According to the Center for Disease Control and Prevention, almost half of the confirmed cases are concentrated in New York, California and also Washington DC. As of Tuesday evening, the numbers on the confirmed deaths and cases had sharply increased in regard to the past two months when the first case was confirmed.
A number of state officials have criticized the manner in which the federal government is responding to the virus. According to the Director of the Center for Disease Control and Prevention Robert Redfield, the lack of funding has significantly hampered the manner in which the federal government responds to the coronavirus outbreak.
Redfield said that ‘the truth is we’ve under-invested in the public health labs and there is not enough equipment, there are not enough people, there’s not enough internal capacity, there’s no search capacity.’
With these shocking facts on the ground, the stock market at large looks at a dim near future as investors continue growing weary of the high volatility.