Kevin Warsh may be the most hawkish Federal Reserve chair since Paul Volcker. That’s a compliment in some circles. It’s also a warning. Volcker beat inflation, but he broke things on the way, and the bond market is now finding out what Warsh might break.
Thirty-year Treasury yields have climbed to their highest level since 2002. In September alone, the 10-year yield jumped more than half a percentage point, to about 5.3%. It was the worst month for U.S. government bonds in four years.
