FX.co ★ Treasury Yields Rebound Toward 5-Month High

On Monday, the yield on the 10-year US Treasury note climbed above 4.28%, approaching the five-month high of 4.3% recorded two weeks earlier. This increase followed a recovery in equities as markets evaluated the Federal Reserve's monetary policy direction under the newly appointed Chairman, Kevin Warsh. Investors shifted towards riskier assets after an initial pullback earlier in the week, with major exchanges substantially raising margin requirements for open positions following a significant drop in bullion prices. Meanwhile, fixed-income investors continued to deliberate over how Warsh might steer the Federal Open Market Committee (FOMC) this year. Known for his inflation-averse stance, Warsh has historically opposed an expanded Federal Reserve balance sheet during the global financial crisis, resulting in a broader US yield curve at the start of the month. Additionally, yields rose following the release of new data from the Institute for Supply Management (ISM), which showed an unexpected resurgence in the US manufacturing sector.