U.S. 2-Year Treasury Yield Surges to 4.23% as Warsh Shifts Fed Policy Communication

On Monday (June 22), U.S. Treasury yields surged following Fed Chair Kevin Warsh's signals that market expectations, rather than Fed guidance, should drive rate, inflation, and economic outlooks. The 2-year Treasury yield rose 5 basis points to 4.23%, breaking through the Fed's policy rate ceiling of 3.50–3.75%. The benchmark 10-year yield also climbed about 5 basis points to 4.51%, which influences 30-year mortgage pricing. The moves came despite U.S. crude oil falling below $74 per barrel, breaking a four-month pattern where bond yields had moved in sync with oil prices, signaling investor expectations of potential future rate increases.
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