Treasury Action: yields popped to session highs
Treasury Action: yields popped to session highs again after Powell indicated that fiscal policy was part of the Fed calculus when setting policy, though just one of many factors considered. The bond market turned defensive on this view in wake of the recent tax cuts and stimulus proposals, though this is not a novel idea considering several other Fedspeakers have admitted that they'll watch and consider the impact of the fiscal changes. The 2-year yield cleared 2.25% in the meantime, while the Tnote yield topped 2.91% from 2.87%. Yields are now 2.8-5.7 basis points higher along the curve, with losses in the belly nearly double those of the wings. The 5s-30s spread has flattened 2-3 bp to +52 bp.