Treasury Yields Tumble as Fed Meets under New Chair Warsh
By John Nada·Jun 16, 2026·2 min read
Treasury yields fall as Kevin Warsh leads his first Fed meeting. Market expectations shift amid U.S.-Iran peace and steady Fed rates.
On May 22, 2026, in the East Room of the White House, Kevin Warsh shook hands with President Donald Trump, marking his official rise as the new Chairman of the Federal Reserve. Fast forward to today, U.S. Treasury yields took a dive as the first policy meeting under Warsh's leadership begins. Notably, the yield on the 10-year U.S. Treasury note dropped over 2 basis points to 4.443%, setting a new tone for the market.
This isn't just a numbers game. The easing of yields mirrors a broader shift in market expectations. Investors are peeling back their bets on inflation-driven interest rate hikes, a sentiment reinforced by the recent peace framework between the U.S. and Iran. The agreement promises to extend the ceasefire for 60 days and reopen the Strait of Hormuz, a critical artery in global oil transportation, without Iranian tolls.
President Trump, arriving at the G7 meeting, emphasized the significance of this peace framework, stating it would allow the Strait to "completely reopen" on Friday. Such geopolitical developments have traditionally influenced energy prices and, by extension, inflation expectations, which central banks, including the Fed, keep a keen eye on.
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In the background, the Federal Reserve is expected to maintain its benchmark lending rate between 3.50% and 3.75%. Traders, as indicated by CME's FedWatch tool, have adjusted their outlook, reducing the likelihood of rate hikes later this year. Mark Haefele, chief investment officer at UBS Global Wealth Management, noted that a durable solution to the Middle East crisis could relieve central banks from the pressure to hike rates due to inflationary energy costs.
While the Fed is the main event, other central banks are also convening this week, though the U.S. central bank's actions usually set the tone. As part of the economic landscape, upcoming data on housing and retail sales in May, set to be released tomorrow, could further impact market dynamics.
Yet underlying all this is the human factor—Warsh, at the helm for the first time, steering the ship in a climate of cautious optimism. His debut in this role could mark the beginning of a new chapter in U.S. monetary policy, amid a landscape of easing tensions and steady rates.