- Yields on U.S. Treasury bonds drop as markets anticipate a shift in monetary policy following signals from the Federal Reserve.
- Fed Chair Jerome Powell’s comments at Jackson Hole reinforce expectations of a potential interest rate cut in September.
New York, August 26 (FinanceFlashNews.com) – Yields on U.S. Treasury bonds began the new week on a downward trend, driven by investor reactions to signals from the U.S. Federal Reserve (Fed). Federal Reserve Chair Jerome Powell indicated on Friday that the central bank might soon reduce interest rates, which has heightened market expectations.
As of 11:00 AM CET on Monday, the yield on the 10-year U.S. Treasury bond had fallen by approximately 1 basis point to 3.791%. Similarly, the yield on the 2-year Treasury bond decreased by about 1 basis point to 3.895%.
This decline follows a significant drop last Friday, when the yield on the 10-year bond fell by around 6 basis points, and the 2-year bond yield dropped by 10 basis points.
“It’s time for a correction in monetary policy,” Powell stated during his much-anticipated speech at the Fed’s annual meeting in Jackson Hole. He emphasized that “the direction of monetary policy is clear,” but the timing and pace of interest rate reductions will depend on incoming economic data, the inflation outlook, and the balance of risks.
With Powell’s remarks reinforcing the likelihood of a rate cut in September, the bond market has reacted accordingly, reflecting the broader economic uncertainties and the Fed’s commitment to adjusting its approach based on evolving conditions.
Keywords: U.S. Treasury Yields, Federal Reserve, Interest Rates, Jerome Powell, Jackson Hole
