Bond Market Tests Fed Chairman Warsh's Credibility on Inflation

Federal Reserve Chairman Kevin Warsh stated that the central bank is committed to controlling inflation during his remarks after the Fed's highly anticipated meeting.

However, the bond market responded with skepticism, surging long-term yields in response to Warsh's comments. The 30-year US Treasury yield rose from around 5.1% to 5.21%, its highest level since 2007, while the 10-year yield jumped from just above 4.61% to nearly 4.69%, nearing its highest level in over a year.

The increase in yields signals that traders are concerned the Fed might not do enough to curb stubborn inflation. This is despite the fact that Warsh has been outspoken about his commitment to taming inflation and has assigned task forces to review the central bank's approach to inflation.