Treasury Yields Dip Amid U.S.-Iran Tensions and Fed Policy Watch
U.S. Treasury yields edged lower early Monday as investors closely watched developments between the United States and Iran, along with remarks from Federal Reserve Chair Kevin Warsh at Jackson Hole. The 10-year yield fell slightly to 4.712%, while the 30-year remained flat near 5.21%. Meanwhile, the 2-year Treasury yield dropped by two basis points following a sharp rise on Friday after Warsh's hawkish comments. Markets are now pricing in an increased likelihood of a rate hike at the Fed’s September meeting, with money markets assigning a nearly 60% chance to such action. Barclays strategists anticipate two hikes this year—September and December—if inflation remains off target. However, UBS' Mark Haefele maintains that steady disinflation trends may allow rates to stay unchanged. Investors are also watching key economic data releases for more clues on Fed policy while tensions with Iran escalate again after recent U.S. strikes and Iranian retaliation. Oil prices rose sharply in response.
Topics: Federal Reserve inflation interest rates Treasury yields