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US Treasury yields stay steady ahead of Kevin Warsh Jackson Hole speech
The 30-year yield held at 5.185% and the two-year at 4.222% as traders focused on the Fed chair’s policy signals, with a 74% chance priced for at least a 25 basis point hike by December.
US Treasury yields were largely unchanged on Thursday as investors awaited fresh signals on the Federal Reserve’s policy path from the Jackson Hole symposium, the first gathering under Chair Kevin Warsh, according to LiveMint Markets.
The 30-year Treasury bond yield was flat at 5.185%, while the two-year Treasury note yield edged down to 4.222%. Warsh is scheduled to deliver his first major speech as Fed chair on Friday, and the address is expected to clarify the outlook after criticism of his prior lack of detail on the economy and the future path for rates.
Ahead of the event, Kansas City Fed President Jeffrey Schmid said current central bank rates are not restrictive enough to restrain the economy and suggested further rate increases to return inflation to the Fed’s 2% target. Globally, Bank of Japan Deputy Governor Ryozo Himino said timely rate hikes could help prevent an inflation spike, though he did not signal an imminent move.
Market expectations have been supported by data showing July inflation rose more than expected and that the US economy grew at a 1.5% annualised pace in the second quarter. Traders priced no change to borrowing costs in September but saw a 74% chance the Fed will raise rates by at least 25 basis points by December, citing upside inflation risks tied to elevated oil prices amid Middle East tensions.