Kevin Warsh has been running the Federal Reserve for about 100 days, and the bond market has already made up its mind: it does not believe him. 30-year Treasury yields surged 14 basis points to nearly 5.23%, their highest level since 2007, while July 2026 PCE inflation came in at 3.7%, nearly double the Fed’s 2% target. The implied probability of a September rate hike rose to roughly 57%, reflecting market skepticism about Warsh’s resolve. Warsh’s decision to abandon forward guidance adds another layer of uncertainty, with every data release and speech becoming a potential catalyst for volatility. The September meeting will be the first real test of Warsh’s credibility.
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