2-year Treasury yield jumps as Warsh says Fed may 'have work to do'

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The 2-year Treasury yield jumped Friday as global investors assessed the keynote speech from Federal Reserve Chair Kevin Warsh at Jackson Hole.
The yield on the 2-year Treasury note, which typically reacts in line with short-term Federal Reserve interest rate decisions, was 6 basis points higher at 4.294% — or the highest going back to July.
The 10-year Treasury note was 2 basis points higher at 4.692%, while 30-year Treasury bond yield was little changed at 5.187%.
One basis point equals 0.01%. Yields and prices move inversely.
Warsh's remarks will be closely monitored for any indication of his views on how monetary policy should respond to persistently above-target inflation, or the impact of rising long-term borrowing costs.
Warsh did acknowledge that inflation is running hot, saying, "While this summer's PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved."
He added, "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That's our job . . . our mandate . . . and our charge to keep."
Odds of an interest rate hike coming in September rose Friday to 41.7%, up from 35.4% one day ago, according to the CME FedWatch Tool.

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