Lowered expectations for US rate hikes boost stocks and US Treasury bonds

According to foreign media reports, the prospect of the Democratic Party taking control of Congress has led investors to believe that the resulting political gridlock in Washington will curb government spending, and that artificial intelligence (AI) regulation could also drag down U.S. economic growth, reducing the necessity for further interest rate hikes. As a result, U.S. Treasury prices rose on Wednesday. The 10-year Treasury yield fell by about 5 basis points to 4.90%, while the 2-year Treasury yield slipped further to a nearly two-month low of 4.5458%. Boosted by lower expectations of U.S. interest rate hikes, the stock market posted gains.