Covid-19 Variant Upends Investor Bets on Rate Increases

Investors piled into government bonds and quickly recalibrated their expectations for interest-rate increases in response to the new Covid-19 variant first identified in South Africa.

The yield on the 10-year U.S. Treasury note dropped to 1.484% Friday, according to Tradeweb, from 1.644% at Wednesday’s close. That marks the largest trading-session decline since March 2020, at the start of the coronavirus pandemic. Yields fall as bond prices rise.