Bond Market Update

Short End Slips

• U.S. Treasuries trade on their lows after seeing some volatility just as the market received Fed Chairman Warsh's speech that he just finished delivering at the Jackson Hole Economic Symposium. Treasuries rallied to highs in immediate reaction to the release, followed by a quick reversal to lows, paced by the short end. Unsurprisingly, the Fed chairman repeated that he intends to run a "quieter Fed." Still, he made some comments about the economy, saying he is impressed with the overall performance and the resilience to shocks. He highlighted strong business spending, noting that roughly half of that spending is related to the AI buildout. He also focused on strong profit growth over the past year and said that credit and loan markets are not being restrained by policy. Mr. Warsh concluded by saying that he wants to commit to a discipline rather than to a decision, serving as a reminder of his unwillingness to signal planned policy changes.
• Yield Check:
  • 2-yr: +6 bps to 4.29%
  • 3-yr: +5 bps to 4.35%
  • 5-yr: +4 bps to 4.44%
  • 10yr; +1 bp to 4.69%
  • 30-yr: -1 bp to 5.18%