It's also helping to drive yields up in Europe as well

US treasuries may have gotten a boost from the Senate passing the bill on US tax reforms, as 10-year yields rose up to 2.40% after Friday's close of 2.36%.

But it's also helping to give a bit of a boost to European yields as well. German 10-year yields opened today higher and is now at 0.34% compared to Friday's close of 0.30%. Though it is still capped by that 0.50% topside level.

While the tax news is helping to boost up US yields for now, it's not going to be the main driver to sustain higher levels of yields. That will ultimately still be the Fed.

Rate hikes will still be what is needed to push up yields in the long run, and this temporary reprieve from tax talks will fade eventually. Back in 2005 when the Fed tightened monetary policy, it took about 1.5 - 2 years before 10-year yields responded with a move higher to the increase in the Fed funds rate.

That coincided with rates being close to where yield levels were at the time. Currently, we have about a 120 bps separation between the Fed funds rate and 10-year yields. Will we see the same thing before yields start moving up again? If so, expect yields to stay pinned within this 2 - 2.6% region in 2018.