Dollar falls while gold and US Treasury bonds rally as markets react to Democrats’ midterm election victory – business live

Democrats’ capture of Congress raise expectations of tougher regulation of AI sector; US stock futures turn positive, reversing earlier declines US government bonds have rallied, pushing yields down, as investors were relieved that Democrats’ capture of Congress could limit Donald Trump ’s spending plans. The yield, or interest rate, on the benchmark 10-year US treasury bond fell 4. 7 basis points to 4. 918%, while the two-year bond yield dropped 3. 7bps to 4. 597%. Yields fall when bond prices rise.

For bond investors, the significance of the midterms is ultimately about what they mean for US borrowing. The result makes further significant fiscal expansion harder to deliver through Congress, potentially easing some of the pressure around government borrowing and Treasury issuance. That could be supportive for US Treasuries, but it won’t determine the direction of yields on its own. Growth, inflation and the Federal Reserve remain crucial. If the economy slows and inflation continues to ease, there is a stronger case for Treasury yields to move lower. Investors will be parsing what this…