Federal Reserve Governor Christopher Waller said he would prefer to keep interest rates unchanged as long as inflation continues to slow. Driven by this, US Treasury bonds rose. Thursday's rally drove yields on various maturities down 3 to 5 basis points, with two-year US bonds, which are more sensitive to changes in the Federal Reserve's interest rate, leading the way. As the market previously anticipated that the Federal Reserve would raise interest rates this month, the two-year yield broke through 4.40% this week, for the first time since January 2025; after Waller's speech, the yield fell 7 basis points to 4.30%. The US dollar fell 0.5% at one point, weakening against all other G-10 currencies. Tom Di Galoma, managing director of Mischler Financial Group, said that Waller's remarks “relieved” the US Treasury bond market. He said, “It seems that until more inflation indicators are released, he is still in the camp that advocates keeping interest rates unchanged.”

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