US Treasuries are edging higher at the start of the new week, setting the stage for a potentially decisive period in the bond market. The upcoming remarks from Treasury Secretary Scott Bessent and Federal Reserve Chair Kevin Warsh this week could well determine the next direction for yields. Following last week's intense volatility, yields across maturities are broadly declining on Monday.

Last week, the 30-year US financing cost touched its highest level in nearly two decades before the Treasury Department announced an expansion of its buyback program. The 10-year Treasury yield is now down 3 basis points to 4.71%, while the 30-year yield has also slipped roughly 3 basis points to 5.24%.

For investors, the central question revolves around Bessent's next move. After his surprise announcement last week to scale up purchases of longer-dated debt, bond investors are now seeking specific details on what he has previously described as "fiscal measures." Bessent has stated that this initiative is designed to address the nation's substantial budget deficit.

Warsh has also become a focal point for investors. He is scheduled to deliver the keynote address on Friday at the Kansas City Fed's annual Jackson Hole symposium. With inflation still clearly above target and Bessent attempting to push down longer-term borrowing costs, the market is eager to understand how the Fed will navigate the relationship between these two forces.

"The market will be waiting this week for Kevin Warsh's first Jackson Hole speech since becoming Fed Chair. The long end of the curve remains highly sensitive, and investors want to know how the Fed will respond to the Treasury's actions," said Yu Xiuyuan, senior market strategist at BNY Mellon.

Yu also noted that Wednesday's release of the July Personal Consumption Expenditures (PCE) data will be crucial. Economists surveyed by Bloomberg anticipate that the headline PCE reading will ease modestly to 3.6% year-over-year from 3.7% in the prior month, while the core PCE figure is expected to hold steady at 3.3%.

Warsh has offered little forward guidance since taking office in May. A public appearance following the last policy meeting triggered a significant selloff in Treasuries, underscoring just how sensitive the market is to his Friday remarks. Longer-dated yields briefly touched their intraday lows following media reports that the Treasury Department may utilize its general account to fund the debt buybacks. In 2015, the Treasury established a policy requiring the account to maintain a minimum balance equivalent to five days of expenditures, or at least $150 billion, to safeguard against sudden market disruptions that could impede its access to debt financing. The 30-year yield fell as much as 5 basis points to 5.22% before paring some of those losses.

Even with Monday's modest decline, yields remain near the levels seen when the Treasury announced its intervention last week, signaling that the department is not satisfied with current borrowing costs. A key mandate for Bessent upon his appointment by Trump has been to find ways to push down Treasury yields at a time when annual interest payments on US debt far exceed $1 trillion.