Global bond yields fall after Fed governor says he may back holding rates steady

Bond yields around the world fell Thursday, after Federal Reserve board of governors member Christopher Waller said he would support holding interest rates steady if economic conditions warrant it.

“If there is continued progress toward our 2 percent goal, then I am willing to support holding the policy rate at its current level,” Waller said Thursday at the Reuters NEXT Newsmaker event in Washington, D.C.

But the Fed governor noted that if inflation “comes in hot” for August, he would “consider a rate hike” at the next meeting of the Federal Open Market Committee (FOMC) Sept. 15-16.

The 10-year U.S. Treasury bond yield dipped below 4.75 percent Thursday morning, after closing Wednesday at above 4.79 percent and peaking at nearly 4.82 percent during intraday trading.

The yield on the 30-year Treasury bond is below 5.23 percent as of the late morning. The note closed at about 5.27 percent Wednesday and reached a 19-year intraday high Aug. 18.

Japan’s 10-year bond yield , meanwhile, is down more than 6 basis points from its Wednesday closing mark of about 3.02 percent. Global bond yields had spiked in recent weeks , as investors sold off amid persistent inflation and mounting public debt.

Annual inflation was 3.7 percent in July , according to the personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation. That matched annual inflation data from June and remained above the central bank’s 2 percent target rate.

The Bureau of Economic Analysis will release PCE data for August on Sept. 30, after the FOMC holds its next meeting. But the Bureau of Labor Statistics will release inflation data based on the consumer price index (CPI) on Sept. 11.

Annual inflation as measured by the CPI dipped from 3.5 percent in June to 3.4 percent in July . Energy prices have remained elevated amid the ongoing Iran war , with energy costs up 14.7 percent last month relative to July 2025, per the CPI .

Waller said at the Reuters event his decision on the “appropriate stance of policy” at the next FOMC meeting “will be heavily influenced by what we learn” regarding August inflation.

“If there is evidence that progress toward 2 percent inflation reversed in August, a small adjustment in our stance would help ensure that it resumes,” added the Fed governor, whom President Trump appointed in 2020.

The Federal Reserve Bank of Cleveland projects year-over-year inflation , as measured by the PCE, will rise to 3.8 percent in August and to 3.91 percent in September.

The branch also projects annual inflation based on the CPI will be 3.38 in August and 3.42 in September.

At the FOMC’s last meeting in July , Waller was among nine members of the panel who voted to hold the baseline interest rate range at 3.5 percent to 3.75 percent. Federal Reserve Bank of Dallas President Lorie Logan, Cleveland Fed President Beth Hammack and Minneapolis Fed President Neel Kashkari voted to raise rates by 0.25 percentage points.

Financial markets are setting the odds of a quarter-point rate hike at 50.4 percent as of Thursday, according to the CME FedWatch tool , which tracks bets placed on future FOMC rate decisions.