US Treasury 10-Year Yield Rises Above 4.25% as Markets Weigh Fed Outlook Under Kevin Warsh

The yield on the 10-year US Treasury note edged higher on Monday, climbing above 4.25%, as investors reassessed the outlook for US monetary policy following the nomination of Kevin Warsh as the next chairman of the Federal Reserve and ahead of the release of a closely watched US jobs report.

Markets reacted to the announcement made Friday by Donald Trump, naming Warsh as the new Fed chair — a move widely interpreted by investors as signaling a more hawkish leadership stance. While Warsh is seen as supportive of interest rate cuts, analysts expect a more measured approach compared with other potential candidates.

In addition to interest rate policy, Warsh is also expected to prioritize a reduction of the Federal Reserve’s balance sheet, a strategy that could tighten liquidity conditions by decreasing the amount of money circulating in financial markets.

Despite the shift in leadership expectations, traders continue to price in two Federal Reserve rate cuts in 2026, although internal divisions persist within the Federal Open Market Committee over the timing and scale of further monetary easing.

Investor attention now turns to Friday’s US monthly employment report, which is expected to provide fresh insights into labor market conditions and may influence near-term interest rate expectations.

Market participants say bond yields are likely to remain volatile in the coming sessions as economic data and policy signals shape expectations for the Fed’s next moves.