Markets Call Out Fed's Inflation Credibility

Markets responded skeptically to Federal Reserve Chairman Kevin Warsh's promise to deliver 2% inflation, calling it 'all hat and no cattle'. The central bank's decision was met with a surge in long-dated bond yields, with the 30-year Treasury (^TYX) yield hitting its highest level since 2007.

Warsh told reporters that the Fed will meet its goal of 2% inflation without exceeding it. However, Bank of America economists pointed out that Warsh often sidesteps questions from reporters and suggested alternative measures of inflation in his responses.