Treasury yields have pared overnight gains after Fed Chairman Kevin Warsh suggested that business investment in artificial intelligence could expand the productive capacity of the economy, which in turn could have “huge implications for monetary policy.”
In recent trading, the yield on the 2-year Treasury note, which is particularly sensitive to shifts in interest-rate expectations, was 4.150%, according to Tradeweb, up from 4.138% Tuesday but down from 4.195% before Warsh’s comments.
Speaking at a central bank symposium in Portugal, Warsh dodged questions about whether the Fed could raise rates at its next meeting. But his comments on AI still provided some hints about his thinking to investors hungry for any clues they can get.