President Trump discusses his administration’s handling of the coronavirus outbreak and its economic impact.
U.S. Treasurys tumbled from historic highs after President Trump backed “very substantial relief” for areas of the economy hit hardest by the new coronavirus outbreak.
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The president floated a payroll tax cut, making sure those infected by COVID-19 don’t miss a paycheck and helping embattled industries, such as airlines and cruise operators, in a Monday evening press briefing at the White House.
“We are going to take care of, and have been taking care of, the American public and the American economy,” Trump said.
TRUMP TO FIGHT CORONAVIRUS ECONOMIC IMPACT WITH PAYROLL TAX CUT PROPOSAL AND OTHER PROGRAMS
When Treasury prices fall, yields rise, and Tuesday’s decline narrowed some of their recent losses. The benchmark 10-year yield, for example, rose 23.4 basis points to 0.732 percent Tuesday morning after plunging to a record low 0.38 percent Monday.
Heavy buying across the complex pushed the entire Treasury curve below 1 percent for the first time Monday as crude crashed and stocks cratered after an oil price war erupted between Saudi Arabia and Russia.
Investors had already become skittish about stocks as the COVID-19 outbreak weighed on travel plans and prompted social distancing, weighing on shares of airlines, cruise lines and retailers. Last week, the Federal Reserve cut its key lending rate by 50 basis points to insulate the U.S. economy from the fallout.
Fed fund futures traded at the Chicago Mercantile Exchange are pricing in a 65 percent chance the central bank cuts by another 75 basis points, taking its benchmark rate to a range of 25 basis points to 50 basis points at its March meeting.
On Monday, the market was pricing in a nearly 100 percent chance the Fed would slash rates to a range of zero to 25 basis points, where they hovered for seven years after the 2008 financial crisis.
