Bond Market Reels from Tariffs, War, and Fed Disruption

The bond market is experiencing turmoil due to several factors. Tariffs and the US war on Iran have driven up inflation, making it difficult for the Federal Reserve (Fed) to cut interest rates.

The Fed's new leadership under Kevin Warsh has been disruptive, introducing changes such as task forces to review the Fed's inner workings and altering how they analyze economic data. This has led to a sell-off in Treasury bonds, causing yields to rise.

The 2% inflation target set by the Fed is no longer relevant, according to some experts, who argue that it should be revised to 3%. The Fed's refusal to revisit this target has been seen as a sign of its inability to adapt to changing economic conditions.