US 10-Year Yield Levels Off Amid Hawkish Fed Signals

The yield on the 10-year US Treasury note held steady at around 4.7% on Monday, following a three-session climb, due to hawkish remarks from Federal Reserve Chair Kevin Warsh.

In his Jackson Hole address on Friday, Warsh emphasized that inflation isn't slowing down meaningfully and reaffirmed policymakers' commitment to returning inflation to their 2% target.

The market is now pricing in a 57% chance of a 25 basis point interest rate hike in September, up from about 40% a week ago. This increase in probability was largely driven by Warsh's comments, which supported the notion that the Fed will continue to raise rates to combat inflation.

A surprise upward revision to the University of Michigan's consumer sentiment index also contributed to the rise in US Treasury yields.