Warsh Suggests Revisiting Inflation Target as Bond Yields Spike

On July 31, 2026, Federal Reserve member Kevin Warsh hinted at revising the central bank's inflation target, sparking a surge in bond yields.

The Fed under Warsh has been struggling to contain inflation without sharply tightening monetary policy, leaving investors and policymakers uncertain about its future trajectory.

'This is our number, we will leave it unchanged. Who knows what we will say about the strategy after next January,' Warsh said, adding that he may review the benchmark for fighting inflation, currently set at a 2% annual rise in the personal consumption expenditures price index.

The combination of Warsh's statements and hints at possible changes to the target framework has pushed yields on 30-year Treasuries above 5.2%, a 19-year high.