Treasury Yields Rise as Warsh Warns on Inflation

2026-08-28 14:25 By Joana Ferreira 1 min. read

The 10-year US Treasury yield climbed to 4.73% after Fed Chair Kevin Warsh warned that inflation has not meaningfully slowed, signaling that policymakers may have “work to do” to bring price pressures back to the Fed’s 2% target.

In his first major speech since taking the chair in May, Warsh reiterated that 2% inflation is a firm and fixed objective and said financial conditions are not currently restrictive.

He also emphasized that interest rates remain the Fed’s “predominant tool” for achieving its mandate.

He added that recent PCE and CPI data, while better than expected, do not indicate a meaningful improvement in underlying inflation trends.

His closely watched remarks offered more clarity on his economic and policy views after criticism that his more limited communication strategy had left investors with little guidance on the near-term outlook.

Money markets subsequently priced in a near 50% chance of a September rate hike, according to CME FedWatch.



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Treasury Yields Rise as Warsh Warns on Inflation
The 10-year US Treasury yield climbed to 4.73% after Fed Chair Kevin Warsh warned that inflation has not meaningfully slowed, signaling that policymakers may have “work to do” to bring price pressures back to the Fed’s 2% target. In his first major speech since taking the chair in May, Warsh reiterated that 2% inflation is a firm and fixed objective and said financial conditions are not currently restrictive. He also emphasized that interest rates remain the Fed’s “predominant tool” for achieving its mandate. He added that recent PCE and CPI data, while better than expected, do not indicate a meaningful improvement in underlying inflation trends. His closely watched remarks offered more clarity on his economic and policy views after criticism that his more limited communication strategy had left investors with little guidance on the near-term outlook. Money markets subsequently priced in a near 50% chance of a September rate hike, according to CME FedWatch.
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