Bond Market Slams Warsh for Lack of Clarity on Interest Rates

The bond market sent a warning shot to Kevin Warsh, the Federal Reserve Chairman, after he failed to persuade investors that he would support rate increases to fight inflation.

Yields on longer-term U.S. Treasurys held near their highest levels in 19 years, while those on short-term Treasurys fell, indicating concerns that the Fed would wait too long to lift rates and then have to raise them aggressively down the road.

Investors were disappointed with Warsh's comments at his post-meeting press conference, as he seemed to suggest that rate increases might not be necessary because bond yields had already climbed in recent months.

Many analysts and investors criticized Warsh's performance, saying it was 'galling' that the increase in bond yields was based on an assumption that rate increases were coming soon.