The government is issuing massive debt for coronavirus relief - why aren't interest rates rising? As I understand it, the US Treasury Department issues bonds to pay for the government's coronavirus rescue spending. I might have thought that such a large input to the fixed income market on the demand side would increase prices, i.e., that interest rates would rise. 

This hasn't happened though, in fact, the opposite seems to have happened. For example, the yields on 10 year treasuries have gone down since the beginning of 2020 (ref). 

Why is this happening?
One standard way of determining the fair value of a bond yield (for a country that controls the currency it borrows in) is to say that it is the sum of two factors.


The expected (Geometric) average of the overnight rate (that is set by the central bank) over the life of the bond. This equals the expected return of holding money market instruments instead of the bond.
A term premium, which is compensation for taking the returns risk associated with a bond instead of investing in money markets.


Under this view, the lack of a rise in bond yields is easily understood - almost no market participants expect rate hikes.

It should be noted that there are a variety of academic disagreements with the previous explanation. However, if you browse the FRED database, you will see that during recessions, bond yields fall and deficits rise. This is because the rate expectations view is much closer to reality than supply/demand arguments based on deficits being large.

There should be other related questions on this website, but I did not spot any that were directly useful.

FRED 10-year yield
FRED Federal deficit