Bond Market Tests Warsh's Credibility on Inflation Fight

Federal Reserve Chairman Kevin Warsh emphasized his commitment to fighting inflation during a highly anticipated meeting, but the bond market responded skeptically.

The long-term US Treasury yield jumped to its highest level since 2007 as traders expressed concerns that the Fed might not do enough to curb stubborn inflation. The 30-year US Treasury yield rose from around 5.1% to 5.21%, while the 10-year yield climbed from just above 4.61% to almost 4.69%.

Warsh's comments also highlighted a divide within the central bank, with three Fed members dissenting in favor of a rate hike. While Warsh has assigned task forces to review different topics, including the Fed's approach to inflation, markets are growing impatient for action.