BlockBeats news, on August 28, U.S. short-term Treasury yields rose. Federal Reserve Chair Powell, in a highly anticipated speech, emphasized that the Fed needs to curb rising consumer prices, easing some market concerns about its ability to combat inflation.
During Walsh's speech, short-term U.S. Treasuries were sold off while long-term U.S. Treasuries rose. The two-year Treasury yield increased by 5 basis points to 4.28%, while the 30-year yield fell by 1 basis point to 5.19%. Both movements suggest that markets expect the Federal Reserve may need to raise short-term interest rates. Since Walsh's first press conference in June, bond traders have harbored doubts about his policy stance, as he emphasized the need to curb inflation and adopted a hawkish tone. Since the global economy reopened from the pandemic in 2021, U.S. inflation has remained above the Fed’s 2% target. However, the Fed held rates steady again in July, and Walsh did not indicate whether a rate hike is possible this year. Subsequently, long-term Treasury yields rose sharply as traders demanded higher returns to compensate for the risk of rising inflation.
Wash warned on Friday that inflation has not shown meaningful easing, stating that policymakers must be confident that inflation is improving, otherwise the central bank "has more work to do." He also reiterated that policymakers will bring inflation back to the 2% target and emphasized that this goal is clear and fixed.