Moody's: "US Election Chaos Has No Credit Impact"... Treasury Bonds Strengthen

[Asia Economy New York=Correspondent Baek Jong-min] International credit rating agency Moody's has assessed that the uncertainty surrounding the U.S. presidential election results is unlikely to affect the country's credit.

US 10-Year Treasury Yield Trend

On the 4th (local time), Moody's stated in a research note, "The absence of immediate election results may increase financial market volatility, but we believe U.S. authorities will ultimately resolve disputes well without causing significant and lasting credit impacts."

This marks a reversal from their previous stance of observing whether lawsuits and potential confusion over the election results could affect the U.S. credit rating.

In the New York financial market on the same day, the 10-year U.S. Treasury yield was formed at 0.781%, down 0.1% from the previous day. Last night, when President Donald Trump showed an advantage, the 10-year Treasury yield surged to the 0.94% range, but after Democratic candidate Joe Biden gained ground, it returned to its previous level and is currently declining.

The market focused on the fact that the Republican Party's control of the Senate has strengthened, effectively dashing the 'Blue Wave' scenario where the Democrats would control the presidency and both houses of Congress.

This has led to expectations that the scale of fiscal spending for future economic stimulus will be reduced compared to forecasts, which is pulling down Treasury yields.

A market expert explained, "Some expect that if confusion arises due to refusal to accept the election results, a preference for safe assets will occur, and Treasury yields could fall to as low as 0.6%."

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