Treasury Yields Pull Back as Markets Await Waller's Jackson Hole Speech and PCE Data
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Treasury yields dipped Monday — the 10-year fell to 4.71% — yet borrowing costs remain at multi-decade highs; this week's first Jackson Hole keynote by Fed Chair Kevin Warsh and the July core PCE print will together reset the market's rate-path expectations.
How far did yields fall — and why are they still elevated?
The 10-year yield dropped more than 2 bp to 4.7120%, the 30-year fell to 5.2497%, and the 2-year eased to 4.2209%.
This means → Monday's dip merely unwound part of Friday's rise — both the 10-year and 30-year had climbed over 3 bp that day, leaving borrowing costs at multi-decade highs.
In plain terms = rates loosened a notch, but the "expensive" backdrop has not changed.
What are the two events that matter most this week?
August 26: July core PCE — the personal-consumption-expenditure price index the Fed watches most closely — with consensus at 0.2% month-on-month (prior 0.1%) and 3.3% year-on-year, unchanged.
August 28: Fed Chair Kevin Warsh delivers his first keynote since taking office at the Jackson Hole symposium.
This means → data lands first, speech comes second. By the time Warsh speaks, he will have a full inflation-and-growth picture — and markets will parse every word for clues on the rate path ahead.
What did the Treasury buyback plan actually achieve?
The Treasury last week announced an expanded long-bond buyback programme aimed at relieving pressure on the long end of the yield curve — where long-term rates sit.
Yields dipped briefly, then snapped back. In plain terms = the market pocketed the gesture and moved on; long-end pressure was not genuinely defused.
This reflects a bigger backdrop: outstanding U.S. Treasuries have reached $40 trillion, and fiscal strain plus sticky inflation form the core context for this year's Jackson Hole meeting.
What does this mean for risk assets?
Capital.com analyst Daniela Hathorn noted that Bitcoin has rallied 23% this month, on track for its strongest August since 2017 (when August saw a 65% gain).
Her logic: if Warsh strikes a balanced tone and signals no further tightening → a weak-dollar, lower-yield environment persists → risk assets keep running. A hawkish surprise, however, could trigger profit-taking.
Grvt co-founder and CEO Hong Yea added that this week's moves will also be shaped by U.S.–Iran tensions and potential escalation in Ukraine — more than one variable is in play.
What other data releases should investors watch?
Q2 GDP second estimate: consensus 1.5% annualised, down from the first reading of 2.1% — a further downward revision would reinforce the slowdown narrative.
Initial jobless claims (week of August 22): expected at 210,000.
Michigan consumer sentiment final reading: expected 51.0, down from the prior 55.2 — a notable drop.
This means → all of these prints land before Warsh speaks, giving markets a composite picture of inflation, growth, and employment against which to interpret his remarks.
Content is for reference only, not financial advice.