#USShortTermTreasuryYieldsJump Short-Term U.S. Treasury Yields Jump After Fed Chair Warsh’s Jackson Hole Speech
U.S. short-term Treasury yields surged on Friday after Federal Reserve Chair Kevin Warsh signaled that the central bank may still need to tighten policy to bring inflation under control.
The 2-year Treasury yield, which is highly sensitive to near-term monetary policy expectations, climbed more than 12 basis points to around 4.35–4.36%. It marked one of the largest single-day moves in the front end of the curve in recent months. The 10-year yield rose more modestly, while longer-dated yields were relatively stable.
Warsh, speaking at the Fed’s annual Jackson Hole Economic Symposium, said recent inflation readings “do not tell me that underlying trends have meaningfully improved.” He added that if policymakers are not confident inflation is moving toward the 2% target “clearly and at sufficient speed,” the Fed “will have work to do.”
Traders quickly adjusted rate expectations. The probability of a September rate hike rose sharply, according to the CME FedWatch tool, climbing from roughly 35% the previous day to more than 55%.
The move reflected a reassessment of the Fed’s near-term path after a period of mixed signals on inflation and growth.$OPG $COOKIE $GIGGLE
U.S. short-term Treasury yields surged on Friday after Federal Reserve Chair Kevin Warsh signaled that the central bank may still need to tighten policy to bring inflation under control.
The 2-year Treasury yield, which is highly sensitive to near-term monetary policy expectations, climbed more than 12 basis points to around 4.35–4.36%. It marked one of the largest single-day moves in the front end of the curve in recent months. The 10-year yield rose more modestly, while longer-dated yields were relatively stable.
Warsh, speaking at the Fed’s annual Jackson Hole Economic Symposium, said recent inflation readings “do not tell me that underlying trends have meaningfully improved.” He added that if policymakers are not confident inflation is moving toward the 2% target “clearly and at sufficient speed,” the Fed “will have work to do.”
Traders quickly adjusted rate expectations. The probability of a September rate hike rose sharply, according to the CME FedWatch tool, climbing from roughly 35% the previous day to more than 55%.
The move reflected a reassessment of the Fed’s near-term path after a period of mixed signals on inflation and growth.$OPG $COOKIE $GIGGLE