Long Bonds Are Weary Of Warsh’s Inflation Resolve

RIA · Jul 31, 2026

At Wednesday's FOMC press conference, Chair Warsh made it clear that the Fed's number one goal is returning inflation to its 2% target. The reaction in the long end of the bond market was one of disbelief. The 2-year yield fell roughly 4 basis points to 4.24%, while long bonds like the 10-year climbed by 7 basis points to 4.67% and the 30-year surged by more than 10 basis points to 5.20%, its highest level since July 2007. The spread between the 30-year long bond and the 3-month bill widened by roughly 20 basis points. The message embedded in that yield curve steepening is that the market…