Two-Year Treasury Yield Surges Amid Warsh's Rate Hike Warning

The two-year Treasury yield rose by 9.5 basis points to 4.325% after comments from Federal Reserve Chair Kevin Warsh increased the likelihood of a rate hike in September.

Warsh's speech, on August 28, 2026, boosted the chances of a rate increase to 55.7%, up from 35.4%. The yield on the 10-year note also rose by 2.8 basis points to 4.70%.

The probability of a September rate hike increased significantly after Warsh's comments, despite his warning that policymakers would face challenges if inflation wasn't on track to reach 2%.