Treasury Yields Stabilize as US Budget Deadlock Progress Boosts Market Sentiment in November 2025

• How Are Treasury Yields Reacting to the Shutdown Resolution?
• What Does the Funding Bill Mean for Market Liquidity?
• How Are Global Markets Responding?
• What's the Economic Impact of the Prolonged Shutdown?
• What Are Traders Betting On?
• How Are Corporate Earnings Holding Up?
• What's Next for Investors?
• Frequently Asked Questions

In a welcome relief for investors, Treasury yields have steadied this week amid signs of progress toward ending the US government shutdown. The 10-year yield held at 4.11%, while shorter and longer-term bonds showed modest gains. This stability comes as the Senate passed a funding bill that could reopen federal agencies by January 30, potentially ending the longest government shutdown in US history. Market analysts suggest the resolution could restore confidence in US assets and ease liquidity pressures, with global stock markets already responding positively to the developments.

How Are Treasury Yields Reacting to the Shutdown Resolution?

As of Friday, November 10, 2025, key Treasury yields showed remarkable stability compared to last week's peaks. The benchmark 10-year Treasury yield settled at 4.111%, barely changed from previous levels. Meanwhile, the 2-year yield edged up three basis points to 3.58%, and the 30-year bond gained one basis point to 4.71%. This relative calm in the bond market suggests investors are cautiously optimistic about the shutdown resolution.

The BTCC research team notes that this stability is particularly noteworthy given the 40-day shutdown's disruption to economic data flows. "We're seeing the market price in reduced uncertainty," commented a BTCC market strategist. "The yield curve is telling us that while investors remain cautious, they're beginning to anticipate a return to normalcy in federal operations and economic reporting."

What Does the Funding Bill Mean for Market Liquidity?

The Senate-approved bill, which follows House passage, WOULD unlock approximately $200 billion currently held in the Treasury's general account. This injection of liquidity could ease recent market tensions that had raised borrowing cost concerns. According to TradingView data, the potential liquidity boost comes at a critical time when foreign demand for US assets had shown signs of weakening.

Bob Savage, head of macro strategy at BNY Mellon, observed: "The trifecta of shutdown risks, heavy Treasury issuance, and softening foreign demand created unstable liquidity conditions. A smooth government reopening combined with Fed support could reignite risk appetite, especially for AI-related equities."

How Are Global Markets Responding?

Equity markets worldwide have cheered the shutdown progress. In pre-market trading, Dow futures rose 204 points (0.43%), while S&P 500 and Nasdaq 100 futures gained 0.98% and 1.52% respectively. Tech and AI stocks led the charge, with Nvidia up 3.6%, Alphabet rising 2.5%, and Meta gaining 1.07% before the opening bell.

European markets followed suit, with the Stoxx 600 climbing over 1.5%, Germany's DAX adding 1.3%, and France's CAC 40 advancing 1.53%. Asian markets weren't left out - Japan's Nikkei ROSE 1.3%, South Korea's Kospi surged more than 3%, and Hong Kong's Hang Seng gained over 1.5%.

What's the Economic Impact of the Prolonged Shutdown?

The 40-day shutdown has created significant economic headwinds, delaying crucial data on inflation, employment, and consumer trends. WHITE House economic advisor Kevin Hassett warned that extending the shutdown into Q4 could push economic growth into negative territory. However, the bond market's recent stability suggests investors believe the worst may be over.

Interestingly, ICE Markets data reveals an unexpected silver lining - October's lower rates drove qualified mortgage refinance applications to a 3.5-year high. This counterintuitive development shows how markets adapt to changing conditions, even during political gridlock.

What Are Traders Betting On?

Prediction market Polymarket currently prices an 87% probability of the government reopening this week. Nigel Green, a market strategist, interprets the Senate's action as signaling imminent normalization: "If Washington reopens this week, we expect Treasury yields to stabilize further and capital to Flow back into risk assets by December."

However, Savage cautions that while confidence is returning, it remains fragile: "The Treasury market shows improving sentiment, but markets need confirmation. We're not out of the woods yet." This nuanced view reflects the delicate balance between Optimism and caution in current market psychology.

How Are Corporate Earnings Holding Up?

Amid the political drama, corporate America continues to deliver strong results. Of the 446 S&P 500 companies reporting Q3 earnings so far, a remarkable 87% have beaten expectations, with aggregate profit growth estimated at 16.8% year-over-year. This earnings resilience has helped cushion markets from shutdown-related volatility.

As the shutdown hopefully concludes, investors will focus on whether this earnings momentum can continue into 2026, especially if the economic recovery faces shutdown-induced headwinds. The coming weeks' data releases - once government agencies resume operations - will provide crucial clues about the underlying health of the US economy.

What's Next for Investors?

With the shutdown's end potentially days away, investors should prepare for several scenarios. A clean resolution could spark a "relief rally" across risk assets, while any last-minute complications might renew volatility. The BTCC team suggests watching these key indicators:

• Treasury auction demand as normal operations resume
• Fed commentary on liquidity conditions
• Backlog of economic data releases
• AI sector performance as a risk appetite gauge

Remember, as with any market-moving event, it's crucial not to overreact to headlines. The shutdown's resolution, while important, represents just one piece of a complex global investment puzzle. As always, diversification and disciplined risk management remain investors' best allies in navigating uncertain markets.