US Treasury Yields Hold Steady Ahead of Fed Jackson Hole Conference

U.S. Treasury yields showed mixed movement early this week as investors awaited the Federal Reserve's July meeting minutes and the upcoming Jackson Hole symposium, where Fed Chair Jerome Powell is expected to provide guidance on future monetary policy. The 2-year Treasury yield dipped slightly to 3.76%, while the 10-year note yield rose just under 1 basis point to around 4.34%, reflecting cautious market sentiment ahead of these events. President Donald Trump met with Ukrainian President Volodymyr Zelensky in Washington, emphasizing U.S. security support and plans to engage Russian President Vladimir Putin, underscoring geopolitical tensions that continue to influence market dynamics. Despite recent strong inflation and retail sales data tempering expectations for aggressive Fed rate cuts, markets still price in a high likelihood of a 25 basis point cut in September and a significant chance of further easing by mid-2026. The widening yield curve, with a steepening gap between short- and long-term Treasury yields, suggests investor anticipation of future rate cuts despite persistent inflation concerns. Additionally, S&P Global maintained the U.S.'s 'AA+' credit rating, noting that tariff revenues will help offset fiscal impacts from President Trump's tax policies.