The bond market to Kevin Warsh: What are you doing about inflation? | CNN Business

Federal Reserve Chairman Kevin Warsh repeatedly said Wednesday that the central bank is committed to reining in inflation. “Let me reiterate: There is no soft inflation target,” Warsh said in remarks after the Fed’s highly anticipated meeting. “There is no soft implicit target, not on this committee’s watch. There’s only a target, and it’s 2%.” The bond market called his bluff with a message back: Show us you mean it. Long-term bond yields surged during Warsh’s remarks, with the 30-year US Treasury yield jumping from around 5.1% to 5.21%, its highest level since 2007. The 10-year yield jumped from just above 4.61% to almost 4.69%, nearing its highest level in over a year. Long-term yields move on expectations for inflation and economic growth. The surge in yields signals traders are concerned that the Fed might not do enough to rein in stubborn inflation. Meanwhile, the short-term two-year US Treasury yield, which tracks expectations for Fed policy, dipped lower and was relatively unchanged. Traders in recent months have raised bets on the Fed hiking rates this year to combat inflation, and the rise in the 10-year yield can also reflect rate-hike anticipation. But