US Treasury yields Fall as Fed Signals Caution on rate hikes

Short-dated US Treasury yields fell on October 29, 2026, after the Federal Reserve left borrowing costs unchanged and offered limited guidance on future moves. The two-year Treasury yield dropped 5.4 basis points to 4.680% during Asian trading, reflecting renewed demand for shorter-dated government debt as investors reassessed the pace of monetary tightening.

The Federal Reserve kept the federal funds target range at 3.75% to 4.00% in a 10-to-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of an immediate quarter-point increase. Chair Kevin Warsh noted that inflation could be lowered without unnecessarily damaging economic growth, though he provided little certainty on the timing of future rate changes.

Longer-term yields also declined, with the 10-year yield slipping 4.8 basis points to 4.996% and the 30-year yield falling 3.8 basis points to 5.322%. Futures pricing suggested approximately a 78% probability of a December rate increase, though conviction eased following the central bank's press conference, leaving markets to interpret incoming economic data for further direction.

Read the full story at serrarigroup.com.