US Treasury yields were little changed in August 2026 despite rate volatility in response to policy developments, Federal Reserve (Fed) communications, and incoming economic data. Early in the month, Treasury Secretary Bessent announced an expansion of the Treasury buyback programme, providing support to longer-dated Treasuries. Later, at the Fed’s Jackson Hole Economic Symposium, Chair Warsh reiterated the Fed’s commitment to returning inflation to its 2.0% target and indicated that additional policy tightening could be warranted if progress on inflation stalls. Against a backdrop of resilient economic activity, including continued strength in artificial intelligence (AI)-related investment, the US Treasury yield curve flattened over the month. The 2-year Treasury yield ended August at 4.34%, near its year-to-date high, whilst the 10-year Treasury yield closed at 4.75%, also near the upper end of its range for the year.
Capital markets were active as new issuance remained heavy, led by continued AI-infrastructure financing from technology and hyperscaler issuers. The scale of supply produced modest softening in AI- and technology-related risk premiums whilst investment-grade corporate and securitised markets were broadly stable outside of these subsectors as demand for high-quality income held firm.
The Secured Overnight Financing Rate (SOFR) – a measure of the overnight secured borrowing rate in the US – ended the month at 3.68%. At month-end, the 3-month term SOFR rate was 3.80%, and the 3-month US Treasury bill closed at 3.83%.
