Why the bond market is doubting Fed chairman Warsh

#1

Post by toomuchtodo » Thu, Jul 30, 2026, 6:26 PM UTC

Why the bond market is doubting Fed chairman Warsh
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Re: Why the bond market is doubting Fed chairman Warsh

#2

Post by mark336 » Thu, Jul 30, 2026, 6:53 PM UTC

Actually he said, we will leet the markets determine prices. What does that mean? That's not a policy. He's basically ssaying he'll let the markets crash who cares? Also Trump's war.

Re: Why the bond market is doubting Fed chairman Warsh

#3

Post by mono442 » Thu, Jul 30, 2026, 7:42 PM UTC

> State of play: The market reaction was swift and clear. Traders cut back on their bets that a rate hike is on the way in September, now seeing it as a coin flip.

> Longer-term bond yields soared, with 30-year Treasuries reaching 5.21% on Thursday morning, the highest since 2007.

That doesn't make sense to me. Treasury yields are basically a projection of future interest rates. If Treasuries were sold off and their yields rose, that would mean the market actually expects interest rate hikes.

Re: Why the bond market is doubting Fed chairman Warsh

#4

Post by [deleted] » Thu, Jul 30, 2026, 11:36 PM UTC

mono442 wrote: post #3

> State of play: The market reaction was swift and clear. Traders cut back on their bets that a rate hike is on the way in September, now seeing it as a coin flip. > Longer-term bond yields soared, with 30-year Treasuries reaching 5.21% on Thursday morning, the highest since 2007. That doesn't make sense to me. Treasury yields are basically a projection of future interest rates. If Treasuries were sold off and their…

[deleted]

Re: Why the bond market is doubting Fed chairman Warsh

#5

Post by bigbadfeline » Fri, Jul 31, 2026, 12:38 AM UTC

mono442 wrote: post #3

> State of play: The market reaction was swift and clear. Traders cut back on their bets that a rate hike is on the way in September, now seeing it as a coin flip. > Longer-term bond yields soared, with 30-year Treasuries reaching 5.21% on Thursday morning, the highest since 2007. That doesn't make sense to me. Treasury yields are basically a projection of future interest rates. If Treasuries were sold off and their…

> Treasury yields are basically a projection of future interest rates.

Nope, treasury yields are in an inverse linear relationship with Fed's real interest rate. In the absence of rate hikes, the real interest rate goes down so treasury yields go up.