The two year United States Treasury yield closed the week at 4.61 percent. This marks the eighth consecutive weekly close above 4.5 percent. Before September, the yield had not settled above that threshold since July 2024. The two year yield is closely watched because it reflects market expectations for Federal Reserve policy over the next two years.

This move followed the Federal Reserve decision on October 28 to hold rates at 3.75 to 4.00 percent. The vote was 10 to 2, with two officials favoring an immediate increase. Fed Chair Kevin Warsh said inflation remains elevated while the economy stays strong. After the decision, the two year yield initially climbed near 4.78 percent before easing to 4.61 percent as markets reassessed the pace of tightening. Markets now price a roughly 78 to 86 percent probability of a quarter point hike in December, depending on the data source.

For you, a higher two year yield affects borrowing costs for mortgages, auto loans, and credit cards, and it raises the return on cash and short term savings. It also pressures assets that do not pay interest, such as gold and Bitcoin, because safer alternatives now offer attractive yields.

Markets are watching the upcoming employment and inflation reports. If price pressures ease, the case for a December hike may weaken. If inflation stays firm, the yield may remain elevated. Both directions remain possible. I am holding my positions and watching the market. Which signal matters more to you here, the Fed guidance or the incoming data.

This is not financial advice. #TreasuryYields #USEarningsSeason #FedKeepsRatesSteady #GateSquareHalloween #ShareWeekly

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