Bond Market Rejects Fed Chair Warsh's Inflation Strategy

The bond market isn't buying what Fed Chair Warsh is selling

Investors are losing faith in Federal Reserve Chair Kevin Warsh as long-dated U.S. bond prices plummet and the 30-year Treasury yield hits a two-decade high. His muddled messaging about the 2% inflation target and reliance on market-driven tightening has sparked fears that inflation expectations could become unanchored. With the likelihood of a September rate hike dropping, the bond market signals that his honeymoon period is over and his credibility is under serious scrutiny.