FX.co ★ US 10-Year Yield Approaches 5-Month High

The yield on the 10-year US Treasury note climbed above 4.29%, nearing the five-month peak of 4.3% observed on January 20th. This rise comes as markets evaluate the prospects for economic growth and monetary policy under the incoming Federal Reserve Chairman, Kevin Warsh. Investors have been moving away from the safety of Treasuries due to renewed vigor in the precious metals market. The recent selloff prompted major exchanges to significantly raise margin requirements for open positions, influencing other asset classes. Meanwhile, fixed-income investors are scrutinizing how Warsh might steer the Federal Open Market Committee (FOMC) this year. Warsh, regarded as an inflation hawk, previously opposed a larger Federal Reserve balance sheet during the global financial crisis, causing a widening of the US yield curve earlier in the month. Additionally, yields were pushed higher following new data from the Institute for Supply Management (ISM) that indicated an unexpected recovery in the US manufacturing sector.