New Fed Chair Warsh Delivers Hawkish Debut, Stabilizing Long-Term Treasuries

New Federal Reserve Chair Kevin Warsh delivered a hawkish policy debut on June 18, 2026, signaling a strong commitment to curb inflation. His remarks stabilized U.S. Treasury markets, leading to a rally in long-term bonds as investors digested the Fed's renewed focus on price stability. The 30-year Treasury yield fell 5 basis points to 4.88%, reaching its lowest level since late April 2026, while the 2-year yield held steady around 4.19%. Warsh emphasized a shift from previous Fed communication, prioritizing price stability and indicating a willingness to accept increased market volatility. Analysts suggest Warsh may be compelled to hike rates by July or September 2026 if inflation data does not improve. Market expectations now fully price in a Fed rate hike by October 2026, with approximately half of Federal Open Market Committee officials anticipating higher rates by year-end 2026. The Bloomberg Dollar Spot Index also gained 0.2% on June 18, following a significant rise on June 17, as oil prices receded after a U.S.-Iran agreement, further easing inflation concerns.