22.09.202610:55:33UTC+00Treasury Yields Move Lower

The US 10-year Treasury yield slipped nearly 2 bps to 4.93% on Tuesday, erasing a modest uptick from earlier in the session, as oil prices fell for a fifth consecutive day. Crude’s decline was driven by renewed optimism over a potential diplomatic resolution to tensions involving Iran, which tempered fears of sustained inflationary pressures.

Treasury yields have generally moved lower since the Federal Reserve raised interest rates last week for the first time since 2023. Chair Warsh reaffirmed the Fed’s commitment to restoring price stability, a stance that has helped rebuild the central bank’s credibility in financial markets.

The easing in borrowing costs has occurred despite a more hawkish policy tone, underscored by recent remarks from Fed officials. Chicago Fed President Austan Goolsbee emphasized that the central bank cannot ignore ongoing supply-side shocks, while St. Louis Fed President Alberto Musalem warned that additional rate hikes may still be required to steer inflation back toward the Fed’s target. Futures markets currently price in at least one further rate increase this year.