Oct 5, 2018

The booming economy arrives in the bond market

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Data: FactSet; Chart: Harry Stevens/Axios

The two-year Treasury yield is spiking to levels not seen since before 2008, and U.S. 10-year and 30-year Treasury yields are hitting levels not seen in more than five years, having climbed steadily since September.

Why it matters: The second-longest economic expansion in U.S. history (and longest job-market expansion) shows no signs of slowing, and that has investors driving up bond yields as the Fed continues its plan to gradually raise interest rates.

  • The policy-sensitive two-year Treasury note has steadily risen for the past few years, since the Fed laid out a path to finally "normalize" rates from virtually zero in 2008.

Driving the news: In remarks on Wednesday, Fed Chairman Jerome Powell said interest rates are nowhere near the neutral level that doesn't speed up or slow down economic growth. That comment was a departure from what analysts assumed when the Fed removed the word "accommodative" from its policy statement last week, so faster rate increases are expected.

  • In a separate speech this week, Powell said the Fed's projections of a continued strengthening economy is not "too good to be true."

What to watch: Friday's jobs report is key, especially if wage growth is stronger than economists are expecting (spurring inflation fears, which the Fed has said it's watching closely). Kathy Jones, a fixed income strategist at Charles Schwab, told Axios yields will push even higher, should the job report come in better than the expected 185,000 new jobs.

Go deeper

The mystery of coronavirus superspreaders

Illustration: Sarah Grillo/Axios

A small percentage of people — called superspreaders — may be responsible for a large number of COVID-19 infections, research is starting to indicate.

Why it matters: While there's no method to detect who these people are before they infect others, there are ways to control behaviors that cause superspreading events — a key issue as states start to reopen and debate what types of events are OK.

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 5,931,112 — Total deaths: 357,929 — Total recoveries — 2,388,172Map.
  2. U.S.: Total confirmed cases as of 3 p.m. ET: 1,711,313 — Total deaths: 101,129 — Total recoveries: 391,508 — Total tested: 15,192,481Map.
  3. States: New York to allow private businesses to deny entry to customers without masks.
  4. Public health: Louisiana Sen. Cassidy wants more frequent testing of nursing home workers.
  5. Congress: Pelosi slams McConnell on stimulus delay — Sen. Tim Kaine and wife test positive for coronavirus antibodies.
  6. Tech: Twitter fact-checks Chinese official's claims that coronavirus originated in U.S.
  7. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 31 mins ago - Politics & Policy

Twitter fact-checks Chinese official's claims that coronavirus originated in U.S.

Chinese Foreign Ministry spokesman Zhao Lijian. Photo: Greg Baker/AFP via Getty Images

Twitter slapped a fact-check label on a pair of months-old tweets from a Chinese government spokesperson that falsely suggested that the coronavirus originated in the U.S. and was brought to Wuhan by the U.S. military, directing users to "get the facts about COVID-19."

Why it matters: The labels were added after criticism that Twitter had fact-checked tweets from President Trump about mail-in voting, but not other false claims from Chinese Communist Party officials and other U.S. adversaries.