Treasury Yields Fall After Powell Kept Options Open

Chair Powell’s hawkish tone fails to boost Treasury yields, as markets remain confident that the Fed is done raising rates. Yesterday, he left the door open of further rate increases in case inflation accelerates again. “They will skip in December and then they are done,” Spartan’s Peter Cardillo says. “The Fed’s actions aren’t in line with their tough rhetoric.” In the CME’s FedWatch tool, odds of a hike are priced at nearly 10%, with 90% odds of another hold. The 10-year is at 4.599% and the two-year at 5.020%.