Summary

• Whatever the motivation or strategy, Fed Chair Kevin Warsh, in his public debut on Wednesday, said that “This Committee will deliver price stability,” signaling that a hawkish tilt was possible—perhaps even likely—in the near term.
• The policy-sensitive 2-year yield rose to 4.20% on Wednesday, the highest level in more than two years.
• The benchmark 10-year yield also rose, but at 4.50% remains at a middling level compared with the last several months.
• Perhaps more crucially, the 30-year yield—the most inflation-sensitive maturity—fell, easing to 4.93%, the lowest in over a month.

Maybe he said it to counter expectations that he would be dovish and follow President Trump’s demands for lower interest rates. Or maybe it was simply a clear-eyed recognition that inflation has been heating up. Whatever