Stocks initially kneejerked higher, then retreated on the headlines reporting the proposed budget, which Biden can pass through the Senate using budget rules that allow Dems to circumvent the filibuster. According to the NYT, it calls for the highest sustained levels of federal spending since World War II.

Treasury yields also climbed on the news, which raised expectations for more Treasury supply.

According to the NYT, the increase in federal spending, which follows both the COVID stimulus and Biden's "Build Back Better" infrastructure plans, will be driven by "Biden's two-part agenda to upgrade the nation's infrastructure and substantially expand the social safety net, contained in his American Jobs Plan and American Families Plan, along with other planned increases in discretionary spending."