Treasury Yields Edge Higher Ahead of the Midterm Results
The 10-year Treasury yield rose 2.1 basis points to 4.914% on Tuesday, November 3, as markets waited for the U.S. midterm election results, The Wall Street Journal reported. The two-year yield rose 1 basis point to 4.593%. A basis point is one-hundredth of a percentage point, so these are small moves. Still, the 10-year is the benchmark most mortgage pricing and long-dated corporate borrowing is measured against, and a couple of basis points on a market of roughly $30 trillion-plus is not nothing.
At those closes, the gap between the 10-year and two-year yields, known as the spread, sits near 32 basis points. Further out the bill curve, Hindustan Times reported the 3-month yield at 4.113%, up 0.033 percentage points, and the 6-month at 4.29%, up 0.036 percentage points. Stitched together, the curve runs upward from the 3-month bill to the 10-year, roughly 80 basis points from end to end.
A curve with that upward slope generally suggests the market is not pricing rapid policy rate cuts in the near term. Bill yields alone, though, do not settle where policy rates go next.
The election matters to bond desks because the outcome shapes the fiscal path. Reuters reported that the results of the November 3 contests could add to investor concerns about AI spending and debt ceiling negotiations.
In practice, the makeup of Congress determines how spending bills and any debt limit deal get negotiated. Both feed into the volume of Treasury debt the market has to absorb, which is why rates traders watch committee assignments and majority margins nearly as closely as the headline result.
Supply is the other side of that ledger. TD Securities forecasts net bill supply of $678 billion for the November 2026 to January 2027 period. Net bill supply is the amount of new bills issued beyond the bills maturing in the same window.
Heavy net issuance means more short-term paper for money market funds and dealers to absorb, which tends to keep bill yields firm, all else equal. The forecast is a projection, not a schedule. The actual figure depends on tax receipts and the Treasury's financing decisions.
Forecasters are split on direction. UBS said it continues to expect Treasury yields to settle slightly lower over the next 12 months. Morgan Stanley strategists said the U.S. market correction is nearing an end and that the midterm elections should help remove a major market overhang.
Both are views about where prices go. Both carry the usual problem with calls on a single political event: the election resolves one question while leaving the fiscal and inflation questions open.
Positioning adds a final layer. Traders had bet $133 million on the 2026 midterms across Kalshi, Polymarket and Polymarket US, according to a Reuters commentary published in late October.
Those prices reflect what participants were willing to wager on outcomes. That makes them a useful read on sentiment, but not a forecast of what the Treasury curve will do once the count is in.
The Treasury publishes Daily Treasury Par Yield Curve Rates, which are read off the par curve at fixed constant maturities, along with daily bill rates for each maturity tranche.
The useful test in the coming sessions is whether the curve moves on the election result itself or on what the result implies for spending, the debt limit and bill issuance.
