Kevin Warsh, leading the U.S. Federal Reserve, is taking a hawkish stance that is raising fears of a historic bond market crash. The 30-year Treasury yields have reached their highest level since 2002, and the 10-year yield surpassed 5.3% in September, the worst month for U.S. government bonds in four years. The Fed raised rates by 25 basis points on September 16, signaling further hikes through 2029, while banks’ unrealized losses have crossed the $500 billion threshold. This situation has also pushed mortgage rates above 7%, worsening the housing affordability crisis, with estimated market-wide losses exceeding $1 trillion.
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