Warsh's Inflation Pledge Sends Two-Year Yields Soaring

Kevin Warsh's first major speech as Federal Reserve chair has sparked a reaction in Wall Street traders, who sent short-term yields higher following his pledge to bring inflation down to target.

In his speech on August 29, 2026, Warsh urged a strong determination in dealing with price pressures after recent bond volatility. As a result, two-year yields climbed 11 basis points to 4.34 per cent, while those on 30-year bonds barely budged.

The S&P 500 erased an earlier gain as chipmakers sold off, but the overall market impact was relatively limited. Warsh's speech appeased investors who had been urging a strong stance against inflation, and boosted bets on a rate hike.