Yields pushed higher across the curve this week as Fed Chair Kevin Warsh's Jackson Hole speech landed decisively hawkish, forcing markets to reprice toward hikes rather than cuts.
The 2-year jumped sharply on Friday, with published research noting futures now imply roughly a 60% chance of a rate hike at the next FOMC meeting after Warsh flagged that recent inflation prints weren't reassuring and that financial conditions are "not restrictive." Several commentators, including former Fed officials cited in the week's notes, argued the Fed needs to signal seriousness on inflation even if long rates barely respond.
On the long end, analysts broadly agreed that Treasury buyback operations are too small to cap yields, with fiscal deficits, heavy corporate issuance tied to AI capex, and a shrinking central-bank bid keeping term premia elevated. The 10-year sits near 4.73%, and multiple research desks see the 5% area as a plausible magnet.
A contrarian thread flagged that softer jobs data could still pull yields lower — but that view was in the minority. TIPS drew fresh interest as inflation hedges.