U.S. Treasury Yields Fall, European Bond Yields Edge Higher Ahead of Jackson Hole Symposium

By Emese Bartha

U.S. Treasury yields fell on Thursday, helped by declining oil prices, while European government bond yields edged up slightly as investors awaited the Kansas City Federal Reserve's upcoming Jackson Hole symposium.

Yields stay at elevated levels across the board on both sides of the Atlantic, with investors awaiting signals from central bankers at the Jackson Hole symposium, which starts Thursday and will include a keynote speech by Federal Reserve Chairman Kevin Warsh on Friday.

U.S. Treasury yields reversed Wednesday's rise, which was prompted by strong July PCE inflation data, the Fed's favored gauge of inflation. The headline PCE index rose 0.2% on the month after a 0.1% fall previously, beating analyst expectations of a 0.1% increase in The Wall Street Journal's poll.

The 10-year U.S. Treasury yield fell 1.2 basis points to 4.652% in early European trade, while the 10-year German Bund yield rose 1.1 basis points to 3.234% and the 10-year U.K. gilt yield rose 0.6 basis points to 5.018%, according to Tradeweb.

Warsh's comments will be scrutinized ahead of the Fed's next monetary policy decision on Sept. 16. Money markets currently price a 65% probability of the fed funds target rate range being left unchanged at 3.50%-3.75% at this meeting, according to LSEG.

Mizuho's multi-asset strategist Evelyne Gomez-Liechti expects a "relatively quiet" session as the Jackson Hole symposium begins, with the key event being Warsh's speech.

"First appearances by new Fed Chairs have generally avoided near-term policy signals, and Warsh has already indicated a preference for broader structural themes," the strategist said.

Warsh has so far avoided giving forward guidance, which is a change he has said he aims to put into effect during his tenure. Analysts expect he might therefore avoid hinting at possible interest-rate hikes if inflation remains elevated.

"His communication style is deliberately restrained; explicit forward guidance does not fit his approach," Joerg Held, head of portfolio management at Ethenea Independent Investors said in a note.

"A dovish signal is therefore likely to emerge indirectly--perhaps through an acknowledgement of the work done by internal task forces on inflation measurement--rather than through a clear statement regarding the interest-rate path."

For European bonds, rising gas prices are becoming a concern. European gas prices are near five-month highs even as the price of Brent crude oil has declined on reports of an interim framework between Iran and Oman aimed at resuming safe shipping via the Strait of Hormuz.

"Natural gas has also overtaken oil as the primary inflation concern for European bond traders," Jesper Fjarstedt, senior analyst at Danske Bank, said in a note.

Write to Emese Bartha at emese.bartha@wsj.com

(END) Dow Jones Newswires

August 27, 2026 04:38 ET (08:38 GMT)