NEW YORK (Reuters) – Investors are gauging whether a rally in bond yields to their highest in months can run further, as markets increasingly price in chances that a fiscal stimulus deal is signed in Washington regardless of who wins the Nov. 3 election.

Benchmark 10-year Treasury yields US10YT=RR, which move inversely to bond prices, rose to 0.8682% Friday morning, the highest since early June when the U.S. economy began to reemerge from widespread lockdowns to halt the spread of the coronavirus.

Past rallies in Treasury yields have wilted over the years, as the Federal Reserve has kept rates low to help spark growth.

This time, however, some investors are betting that conditions may be right for a more sustained move. Lawmakers appear ready to deliver more fiscal stimulus in coming months, a vaccine against COVID-19 may come next year, and more U.S. Treasury bond offerings are set to weigh on prices.

“It may now be time to flip thinking on U.S. rates where instead of mechanically buying dips … upticks in bond prices now need to be sold,” analysts at Citigroup wrote on Friday.

Net short bets on the 30-year Treasury US30YT=RR reached an all-time high earlier this month, reflecting wagers that yields would continue to rise on expectations of economic recovery and rising inflation.

Longer-dated bonds are sensitive to inflation expectations as rising consumer prices can erode their value.

The potential for more issuance to fund fiscal stimulus could also be a potential weight on Treasury prices.

The Treasury Department has issued record amounts of debt this year – roughly $15.5 trillion through the end of September – to fund government spending programs, most notably, the stimulus package Congress passed earlier this year.

The heavy supply has had a muted effect on prices so far, given the Fed’s near-zero interest rates and hefty debt purchases. Issuance could rise in the coming months if a fresh round of stimulus funding is passed, however.

U.S. House Speaker Nancy Pelosi said on Friday it still was possible to get another round of COVID-19 aid before the election, but that it was up to President Donald Trump to act, including bringing along reluctant Senate Republicans.

Trump and Treasury Secretary Steven Mnuchin countered that Pelosi must compromise to get an aid package.

At the same time, some investors believe a win by Democratic candidate Joe Biden, who is leading in the polls, and a sweep by Democrats in the Nov. 3 vote would likely usher in a bigger fiscal package and more economic spending, boosting bond prices further.

“My view is that the curve has further to go … if Biden does end up securing the White House and the Democrats take the Senate,” said John Briggs head of strategy, Americas at NatWest Markets.

Bets on a Biden victory may have been further fueled by the lack of any standout moments in the final debate between Trump and Biden on Thursday. Trump entered the debate trailing by 10 percentage points in national polls, though the contest appears tighter in some battleground states where the election will likely be decided.

Rising yields are a potential problem for the Fed as they raise the cost of borrowing for companies and individuals and threaten economic growth.

Still, “the Fed is not interested, exclusively, in keeping long-term interest rates low,” said Guy LeBas, chief fixed income strategist, Janney Montgomery Scott.

“If long-term interest rates rise because of stronger economic or inflation expectations, that is actually a good thing and I don’t think the Federal Reserve intends to choke it off,” he said.

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