The 2-year US Treasury yield surged to approximately 4.32-4.36% on August 28, climbing 12.8 basis points in a single session. Traders are now pricing roughly 60% probability of a Federal Reserve rate hike at the September FOMC meeting, nearly double the 35% estimated the previous day. Fed Chair Kevin Warsh’s hawkish comments at the Jackson Hole gathering confirmed that the central bank is not ready to declare victory on inflation. US stocks ended mixed, with the Nasdaq showing particular weakness amid rising short-term yields. The yield curve flattened, a pattern that typically reflects expectations of tighter monetary policy ahead.
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