By Mark DeCambre, MarketWatch , Sunny Oh

Benchmark 10-year yield nears 2.40%

Treasury prices tumbled early Friday, pushing yields firmly higher, as the Senate passed a budget bill late Thursday that was seen as a crucial bridge to reforming the U.S. tax code--delivering a further jolt to appetite for assets perceived as risky and away from the safety of government bonds.

Where are Treasury yields?

The benchmark 10-year Treasury yield was at 2.380%, compared with 2.323% late Thursday in New York. The 2-year Treasury note yield was at 1.560%, versus 1.555% in the prior session. Meanwhile, the yield on the 30-year Treasury bond , known as the long bond, was at 2.895%, compared with 2.829% late Thursday in New York.

The 5-year Treasury yield broke through 2.00%, a key psychological barrier, for the first time since March.

What's driving markets?

A 51-49 vote, with passage requiring just 50 votes in the Senate (https://www.wsj.com/articles/gop-gears-up-for-tax-overhaul-push-1508491802), clears the way for broader passage of the GOP-led tax overhaul plan. Key House and Senate lawmakers privately hammered out a compromise Thursday that would likely eliminate the need for a conference committee, buying Republicans at least a week to do more tax work. Reform to the tax code has been viewed as one important leg to a slate of pro-business legislations championed by Trump during his 2016 presidential campaign.

Also read:What's next for a tax overhaul after the Senate passed its budget (http://www.marketwatch.com/story/whats-next-for-a-tax-overhaul-after-the-senate-passed-its-budget-2017-10-20)

Trump's election win nine months ago jolted yields and stock values higher on the belief that those reforms would come to passage soon, against the backdrop of a Republican-led Congress. But there have been a host of stumbles along the way that have diminished expectations.

What are strategist saying?

"Markets are anticipating a path forward for tax reform/cuts which, combined with an apparent narrowing of the Fed Chair search to Powell (http://www.marketwatch.com/story/trump-reportedly-leaning-toward-powell-for-fed-chairman-2017-10-19)and Taylor, has pushed the 2-year note yield to its cycle high," said Robert Sinche, global strategist at Amherst Pierpont Securities.

Read:'Trump trade has been reignited'--analysts on what the Senate budget vote means for investors (http://www.marketwatch.com/story/the-trump-trade-has-been-reignited-analysts-on-what-the-senate-budget-vote-means-for-investors-2017-10-20)

What else is on investors' radar?

A reading on existing home sales rose 0.7% in September to an annual rate of 5.39 million. Economists forecast a reading of 5.3 million sales.

And Yellen is set to give a speech at 7:30 p.m. Eastern.

What are other assets doing?

Stocks across the globe are surging with hope of a tax cuts in the No.1 economy in the world helping to foster risk appetite. The Dow Jones Industrial Average , the S&P 500 index , the Nasdaq Composite Index rallied to fresh all-time highs on Friday (http://www.marketwatch.com/story/dow-sp-shape-up-for-more-records-after-senate-clears-big-hurdle-to-tax-reform-2017-10-20). The U.S. dollar also rose on the hope of Wall Street-friendly policies (http://www.marketwatch.com/story/dollar-storms-higher-on-revived-hopes-for-tax-cuts-2017-10-20), with the ICE U.S. Dollar up 0.6% at 93.67.

Meanwhile, the yield on the 10-year German bond , known as the bund, jumped 5 basis points to 0.44%. The yield of Spanish 10-year note , which has been shaken by political drama (http://www.marketwatch.com/story/catalonia-to-declare-independence-if-spain-cancels-autonomy-report-2017-10-18)between the Spanish government and Catalonia's pursuit of independence, rose 3 basis points to 1.65%. Analysts worry that events in Spain may undermine the territorial integrity of the European Union.

(END) Dow Jones Newswires

October 20, 2017 11:37 ET (15:37 GMT)