Treasury yield moves are a result of a more hawkish Jerome Powell, says Schwab's Kathy Jones

Interest Rates and Market Expectations - The market had overly optimistic expectations for Federal Reserve easing, which were not supported by compelling data, leading to a return to equilibrium with anticipated rate cuts next year [2][3] - The 10-year Treasury yield has increased by more than 15 basis points, attributed to a more hawkish stance from Fed Chair Powell [3] Inflation and Investment Strategies - There is a belief that inflation risks are skewed to the upside for the next 6 to 12 months, suggesting a need for exposure to Treasury Inflation-Protected Securities (TIPS) [5][6] - TIPS currently offer a positive real return, making them an attractive investment option [5] Federal Reserve's Future Actions - It is unlikely that the Federal Reserve will implement another rate cut in December, with potential for one or two cuts in 2026 depending on economic data and inflation trends [6][7] Fixed Income Market Performance - The fixed income market is experiencing solid returns across various sub-asset classes, with international bonds yielding a total return of 9.5% year-to-date [8] - There is a renewed opportunity for investment in international bonds, particularly as the dollar weakens [9][10] High Yield Market Concerns - Caution is advised regarding high yield investments, particularly in the leveraged loan market, which may contain lower-quality assets [10][11]