US Treasury yields rose across much of the curve on October 28, 2026, after the Federal Reserve held interest rates steady. The gap between two-year and 10-year yields widened to as much as 34.1 basis points following Fed Chair Kevin Warsh’s press conference.

Key Takeaways

  • Selling pressure was particularly pronounced in Treasuries maturing in five to seven years and beyond.
  • The Fed kept its federal funds target range at 3.75% to 4%.

Treasury yields climb at longer maturities

The yield curve steepened after having flattened over the preceding weeks. A wider gap between two-year and 10-year yields means longer-term yields increased relative to shorter-term yields.

The move followed Warsh’s press conference, but its timing alone does not establish what caused the selloff. Treasury prices generally fall when yields rise.

Fed holds rates as growth assessment improves

The Fed left its benchmark rate unchanged. Its October 28 implementation note directs the New York Fed’s trading desk to maintain the federal funds rate in a target range of 3.75% to 4%, effective October 29.

The central bank described economic growth as strong, compared with the solid expansion cited at its September meeting. It also pointed to robust investment and job gains keeping pace with workforce growth.

Inflation and borrowing remain in focus

Bond investors are weighing persistent inflation and the outlook for US government borrowing alongside the future path of Fed policy. Markets were pricing in another rate increase in December, though that is an expectation rather than a Fed decision.

Anders Persson, chief investment officer for global fixed income at Nuveen, said concerns about the fiscal outlook were a key factor behind weakness in longer-dated Treasuries. Longer-term bonds are particularly exposed to changes in inflation expectations and interest rates.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.