U.S. Treasurys as debt ceiling bill clears House, progresses to Senate
At 5:37 a.m. ET, the yield on the 10-year Treasury was up by 3 basis points to 3.671%. The 2-year Treasury was last trading at 4.442% after rising by over 5 basis points.
U.S. Treasurys rose on Thursday as the debt ceiling crisis came closer to a resolution after the Fiscal Responsibility Act passed in the House vote Wednesday and advanced to the Senate.
The Republican-controlled House of Representatives on Tuesday passed the Fiscal Responsibility Act with a 314-117 majority, boosting optimism about the debt ceiling crisis being resolved ahead of the June 5 deadline. This is the first date on which the U.S. could default on its debt obligations, which would likely trigger widespread economic issues across global financial markets.
Tensions had run high in recent weeks as negotiations between the White House and House Speaker Kevin McCarthy to raise the debt ceiling proved difficult, and their eventual compromise deal drew criticism from both Republicans and Democrats.
The bill must now be passed by the Democrat-controlled Senate, which leaders from both sides have said they hope will happen in the coming days, before it can be signed into law by President Joe Biden.
Elsewhere, investors assessed the outlook for the labor market, awaiting ADP's employment change report for May and weekly initial jobless claims data on Thursday, as well as April's payroll report which is due Friday. ISM's purchasing managers' index report for the manufacturing sector is also due Thursday.
The data is likely to inform the Federal Reserve's next monetary policy moves, especially regarding interest rates, and could provide clues about whether a recession is on the horizon for the U.S. economy.
Source: CNBC
