US bonds rally as Democrat sweep seen stalling spending

US government bond prices rose on Wednesday as investors assessed projections that Democrats would control Congress and constrain spending plans, Business Recorder reported. The 10-year Treasury yield declined about 5 basis points to 4.90% in Tokyo, while the two-year yield fell to a near two-month low of 4.5458%.

Investors also drew comfort from the prospect that President Donald Trump’s proposed $5,000 payment to US adults would not proceed, and sought the relative safety of bonds as equities weakened. Futures tied to the Federal Reserve policy rate reflected slightly lower expectations for rate increases next year. Analysts cited potential limits on government spending and tighter AI regulation as factors that could restrain growth, while lower US yields weighed on the dollar and concern about AI affected Asian technology shares.