Treasuries See Further Downside As Republicans Pass Tax Reform Bill

(RTTNews) - Following the notable decline seen in the previous session, treasuries saw some further downside during trading on Wednesday.

Bond prices moved lower early in the session and remained in negative territory throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 2.497 percent.

With the increase on the day, the ten-year yield moved higher for the fourth consecutive session, reaching its highest closing level in nine months.

The continued weakness among treasuries came as Republican lawmakers managed to send a sweeping tax reform bill to President Donald Trump's desk.

The House voted 224 to 201 in favor of the bill known as the Tax Cuts and Jobs Act, with the vote coming down largely along party lines.

The bill reduces the corporate tax rate to 21 percent from 35 percent, gives tax breaks to pass-through businesses and includes provisions intended to encourage domestic business investment.

The legislation also reduces tax rate for most individuals, although the tax cuts for individuals are set to expire.

The House voted in favor of a similar bill on Tuesday but needed to re-vote due to procedural issues related to the reconciliation process.

The Senate voted 51 to 48 in favor of the $1.5 trillion tax reform bill early this morning, with the vote coming down strictly along party lines.

While GOP lawmakers argue reductions in the tax rates for businesses and individuals will boost economic growth, Democrats claim the legislation will give tax cuts to the wealthy at the expense of the middle class.

The bill also includes a repeal of Obamacare's requirement that everyone has health insurance as well as a provision allowing energy development in Alaska's Arctic National Wildlife Refuge.

In remarks at a cabinet meeting ahead of the vote, Trump described the tax reform bill as an "historic victory for the American people."

On the U.S. economic front, the National Association of Realtors released a report showing a much bigger than expected jump in existing home sales in the month of November.

NAR said existing home sales soared by 5.6 percent to an annual rate of 5.81 million in November from an upwardly revised 5.50 million in October.

Economists had expected existing home sales to rise to a rate of 5.52 million from the 5.48 million originally reported to the previous month.

With the much bigger than expected increase, existing home sales reached their highest level since hitting 6.42 million in December of 2006.

Economic data may attract attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, Philadelphia-area manufacturing activity, and leading economic indicators.