Warsh's First Test: 30-Year Treasury Yield Hits 19-Year High

The 30-year Treasury yield has reached its highest level since July 2007, climbing above 5.27% this week after the Federal Reserve held interest rates steady at its July meeting.

Fed Chair Kevin Warsh's first major test as chairman has raised questions about his willingness to act against inflation, which remains above the 2% target.

Warsh defended the decision not to raise rates, describing it as a 'healthy internal fight,' but three regional Fed presidents dissented in favor of an increase.

The sell-off in bond markets has raised concern about the Fed's credibility, with St. Louis Fed President Alberto Musalem warning that trust must be matched by action.