Kevin Warsh’s Honeymoon With the Bond Market Is Already Over

Long-term U.S. Treasury yields hit 19-year highs after Fed Chairman Kevin Warsh failed to convince investors he would support rate increases to fight inflation.

Short-term Treasury yields fell, signaling concerns the Fed may wait too long to raise rates, forcing aggressive hikes later.

Investors warned that further doubt in the Fed could trigger a worse selloff, increasing rates on mortgages and corporate debt.

Christopher Sullivan, chief investment officer at United Nations Federal Credit Union, said inaction on Fed's part would be 'tantamount to disaster for the long end of the market.'

Warsh was nominated by President Trump in January, and investors initially welcomed him as more independent than alternatives like Kevin Hassett.