Warsh's Inflation Tactic: Will Higher Treasury Yields Do the Trick?

The bond market may be Federal Reserve Chairman Kevin Warsh's preferred tool for fighting inflation through higher Treasury yields, but he hasn't explicitly stated this intention.

Fed funds futures are pricing in a 67% probability that the Fed will raise its target rate at next week's policy meeting, which is still close enough to a coin flip to keep Wall Street guessing.

The Treasury's efforts so far have been unsuccessful, but a potentially conflicting dynamic may be emerging.