# Treasury Yields Fall and Dollar Drops as Fed Chair Signals Hold on Rates

- URL: https://stocks.freetheai.org/news/treasury-yields-fall-and-dollar-drops-as-fed-chair-signals-hold-on-rates-8439ad
- Published: 2026-10-17T00:45:16Z
- Category: central_banks; sentiment: bullish; impact: medium
- Symbols: [NASDAQ:TLT](https://stocks.freetheai.org/symbols/NASDAQ-TLT), [NASDAQ:SHY](https://stocks.freetheai.org/symbols/NASDAQ-SHY), [NYSE:BOND](https://stocks.freetheai.org/symbols/NYSE-BOND)
- Written by our AI from expert market sources across the web for FreeTheAI Stocks, built by Vibhek Soni
- How write-ups are made: https://stocks.freetheai.org/how-we-write
- Not financial advice: https://stocks.freetheai.org/disclaimer

U.S. Treasury yields dropped and the dollar posted its sharpest weekly decline in over a month for the week ending October 16. Fixed-income markets adjusted after Federal Reserve Chairman Kevin Warsh offered no explicit forward guidance on interest rates during remarks at the International Monetary Fund meetings in Bangkok. The lack of direction led market participants to lower the probability of an October rate hike to 20 percent.

Long-term bond prices moved higher as yields eased across the curve. The 30-year U.S. Treasury yield fell 17 basis points to 5.43 percent, while the 10-year yield slipped to 5.08 percent and the 2-year yield settled at 4.72 percent. Reflecting these yield movements, the iShares 20+ Year Treasury Bond ETF (TLT) climbed 2.7 percent for the week, while the iShares 1-3 Year Treasury Bond ETF (SHY) gained 0.2 percent. Lower yields weighed on the dollar, which declined against major foreign currencies and allowed the euro to end a five-week losing streak.

Investors will monitor incoming economic data and central bank communications heading into year-end. Although expectations for an October interest rate increase have dimmed, markets continue to price in one final rate hike in December. Traders are also keeping a close eye on future U.S. Treasury debt issuance plans after primary dealers received no updates regarding potential reductions in long-duration debt auctions.

## Key points

- Federal Reserve Chairman Kevin Warsh offered no rate guidance in Bangkok, lowering October rate hike expectations to 20%.
- The 30-year Treasury yield dropped 17 basis points to 5.43%, while the 10-year yield fell to 5.08%.
- The iShares 20+ Year Treasury Bond ETF (TLT) jumped 2.7% as long-term bond yields declined.
- The U.S. dollar index logged its largest weekly drop since early September against major currencies.
- Markets continue to price in a potential Federal Reserve interest rate hike in December.

## Questions and answers

### Why did Treasury yields fall during the week ending October 16?

Treasury yields declined after Federal Reserve Chairman Kevin Warsh provided no forward guidance on interest rates, leading traders to reduce the probability of an October rate hike to 20 percent.

### How did the iShares 20+ Year Treasury Bond ETF perform?

The iShares 20+ Year Treasury Bond ETF (TLT) rose 2.7 percent for the week as long-term Treasury yields slipped, including a 17 basis point drop in the 30-year yield to 5.43 percent.

### What is the market expectation for future Federal Reserve rate hikes?

While traders scaled back expectations for an October interest rate hike, financial markets are still pricing in one additional rate increase in December.