Fed Chair Warsh's Hawkish Stance Eases Debt Market on June 26, 10-Year Yield Falls to 4.37%

According to Steven Blitz, chief economist at GlobalData TS Lombard, Federal Reserve Chair Kevin Warsh's resolute inflation-fighting rhetoric temporarily soothed the $30 trillion U.S. Treasury market on Friday (June 26), despite May inflation data showing prices rising more than double the Fed's 2% target.

The 10-year Treasury yield fell to 4.37%, reaching its lowest level since May 8, as Warsh signaled he will not cut rates to appease the White House and will not allow inflation to rise unchecked. Meanwhile, core PCE, the Fed's preferred inflation gauge, surged to 4.1% in May, the highest since April 2023. Market expectations for a 25-basis-point rate hike this year have increased to 67%, according to the Federal Reserve Bank of Atlanta's probability tracker, up from 31% two months prior.