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Treasury Yields Steady as U.S. Awaits Presidential Election and Fed Decision

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U.S. Treasury yields remained nearly stable on Tuesday morning as investors anticipated the outcome of the U.S. presidential election. As of 4:45 a.m. ET, the yield on the 10-year Treasury note was down slightly, by less than one basis point, at 4.3029%. Similarly, the 2-year Treasury yield was also marginally lower at 4.1681%. Yields, which move inversely to bond prices, had little movement as markets braced for election results and further economic indicators.

The U.S. presidential election has been a focal point for investors, with polling suggesting a tight race between Vice President Kamala Harris and former President Donald Trump, both tied at 49% in the latest NBC News poll. In addition to the presidency, control of Congress remains in question. A divided Congress could limit either candidate’s ability to push through major policy changes, while a single-party majority would likely enable broader shifts in spending and tax policies.

Beyond election results, investors are also keeping an eye on upcoming economic data and Federal Reserve policy. The October ISM Services PMI, scheduled for release later on Tuesday, will provide insights into the growth rate of the U.S. service sector, potentially highlighting trends in economic health. Additionally, the Census Bureau reported on Monday that factory orders for September fell by 0.5%, aligning with economists’ expectations and reflecting ongoing adjustments in the manufacturing sector.

Looking ahead, the Federal Reserve’s policy meeting on Thursday is expected to draw significant attention. Market participants are widely expecting the Fed to announce a quarter-point rate cut, building on a larger, half-point cut in September. The CME Group’s FedWatch Tool currently indicates a 98% probability of the cut, reflecting widespread anticipation of more accommodative monetary policy as the economy navigates ongoing uncertainties.

 

Harris Takes Unexpected Lead Over Trump in Iowa as Election Nears

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A new poll from the Des Moines Register/Mediacom shows Democratic presidential candidate Kamala Harris leading Republican candidate Donald Trump in Iowa by 47% to 44%, just days before the election. Although the lead falls within the poll’s margin of error of 3.4%, this result represents a surprising 7-point shift in favor of Harris since September. Political experts and observers were taken aback by these findings, as Iowa, a state Trump easily won in both 2016 and 2020, was not anticipated to swing in Harris’s favor.

J. Ann Selzer, president of Selzer & Co., the highly regarded polling firm responsible for the survey, commented on the unexpected result, saying, “It’s hard for anybody to say they saw this coming. She has clearly leaped into a leading position.” The survey, conducted from Monday through Thursday, included 808 likely voters, giving weight to the results among political strategists and campaigns.

The poll indicates Harris’s edge is largely driven by female voters, particularly older and politically independent women. According to Selzer, “Age and gender are the two most dynamic factors that are explaining these numbers.” This demographic support has played a critical role in propelling Harris ahead in Iowa, where neither she nor Trump has campaigned significantly since the primaries.

In contrast to this poll, an Emerson College poll released the same day shows a different picture, with Trump leading Harris by 53% to 43%. The Trump campaign quickly released a memo dismissing the Des Moines Register poll as an “outlier,” stating that the Emerson poll is a more accurate reflection of the Iowa electorate.

Adding another layer of complexity, 3% of likely voters in Iowa still support independent candidate Robert F. Kennedy Jr., who recently exited the race and endorsed Trump. The poll shift is notable given Iowa’s recent voting history, with Trump winning the state by 8 points in 2020 and by 9 points in 2016.

With Election Day just around the corner, Harris’s apparent surge underscores the volatile nature of the current political landscape, especially in states that were previously considered securely Republican.

Harris Emphasizes Manufacturing in Michigan to Counter Trump’s Economic Advantage

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In a bid to strengthen her position ahead of the upcoming election, Vice President Kamala Harris focused on manufacturing during her visit to Michigan on Monday. Speaking at the Hemlock Semiconductor manufacturing center, she aimed to challenge former President Donald Trump’s lead in economic polling.

Key Highlights:

  • Criticism of Trump’s Record: Harris accused Trump of compromising U.S. security by selling advanced chips to China during his presidency. She emphasized that prioritizing America’s security and economic prosperity should be central to any presidential agenda.
  • CHIPS Act Advocacy: Highlighting the Biden administration’s investment in domestic semiconductor production, Harris pointed out that the Hemlock facility benefited from a $325 million investment under the CHIPS and Science Act. She praised the act for creating tax credits that incentivize private sector investments in U.S. manufacturing.
  • Polling Context: Recent polling from CNBC indicated that 46% of respondents believed Trump would be better for the economy, compared to 38% for Harris. In battleground states, Trump held an 8-point lead, reflecting the challenges Harris faces in changing public perception.
  • Campaign Strategy: Harris’s Michigan visit is part of a broader campaign strategy targeting battleground states. She has a packed schedule, including stops in Pennsylvania, North Carolina, Wisconsin, Arizona, and Nevada.

Differing Manufacturing Visions:

  • Trump’s Approach: Trump has proposed repealing the Inflation Reduction Act and criticized the CHIPS Act. He suggested implementing a universal tariff policy on imports to boost domestic manufacturing, which he refers to as a primary strategy.
  • Harris’s Strategy: In contrast, Harris promotes increasing manufacturing through tax credits and government subsidies across sectors such as artificial intelligence, clean energy, and automotive manufacturing. She criticized Trump’s tariff proposal, labeling it a “Trump sales tax” due to concerns over rising consumer prices.

Upcoming Engagements:

Following her speech, Harris plans to visit a labor union training facility and attend a rally with her running mate, Minnesota Governor Tim Walz, in Ann Arbor, as she continues her campaign push in key states leading up to the Nov. 5 election.