September Storm Brews as U.S. Treasury Yields Reach New Heights

The world of finance is bracing for another government bond storm in September. Federal Reserve chief Kevin Warsh's hawkish speech at Jackson Hole on Friday sent U.S. Treasury yields higher across the curve, with the benchmark 10-year borrowing rate reaching its highest level since President Donald Trump took office in January last year.

The rising 10-year yield is expected to have a bigger ripple effect on the economy, influencing mortgage rates and other business and consumer loans. With little change expected in inflation before the Fed meets again later this month, futures markets now see a two-thirds chance of a rate rise then.

Another jump higher in world crude oil prices this week due to renewed military exchanges in the Iran war will add to the pressure. The Bank of Japan and European Central Bank are also likely to raise interest rates this month, further agitating bond markets.