Treasuries’ Worst Quarter Since 2016 Ends With Questions Aplenty
- Traders starting to assess infrastructure-based stimulus plan
- Tax increases will be key to how market reacts to package
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As bond traders wrap up the worst quarter for Treasuries since the aftermath of 2016’s surprise U.S. presidential election result, there’s no shortage of mystery surrounding what comes next.
First and foremost, there’s the likelihood of another massive government-stimulus package -- featuring infrastructure spending, this time -- that could tally as much as $3 trillion. Traders are just starting to debate whether the tax increases expected to be included would offset the stimulative benefits to the economy, and how that calculation might play out in the world’s biggest bond market.