U.S. Political Gridlock Seen Bond-Friendly But Doesn't Fix Deficit -- Market Talk

0559 GMT - Gridlock could be the bond market's friend, but it won't fix the deficit, MissionSquare CIO Shari Hensrud says in a note. A Democratic Congress puts a stronger brake on further fiscal expansion, taking some upside risk out of long-term Treasury yields, she says. "That reduction in fiscal risk could support longer-term Treasurys and put some downward pressure on long-term yields, while the front end remains more tied to the Federal Reserve, inflation and labor markets." But with a Republican White House and Democratic majorities unlikely to be large enough to override presidential authority, major changes to existing tax and spending policy would face a high hurdle, Hensrud says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

November 05, 2026 00:59 ET (05:59 GMT)