FX.co ★ US 10-Year Yield Slips on Warsh Comments

The US 10-year Treasury yield eased to about 5.06% on Monday, hovering near a four-week low, as dovish remarks from Federal Reserve Chair Kevin Warsh led traders to scale back expectations for an October rate hike. Speaking at the IMF’s annual meetings in Bangkok on Friday, Warsh declined to signal the likely outcome of this month’s FOMC meeting but said that hotter-than-expected inflation had not altered his assessment of the US economy. The Fed has now entered its blackout period ahead of the October 27–28 policy meeting, with futures markets assigning roughly an 84% probability that interest rates will be left unchanged. At the same time, investors were closely watching European bond markets amid violent protests in France and neighboring countries, as well as intensifying hostilities between Russia and Ukraine.