The U.S. Treasury's Bond Market Intervention Is a Nightmare Scenario for Fed Chair Kevin Warsh and the FOMC

The article argues that the U.S. Treasury’s recent bond market intervention could complicate Fed Chair Kevin Warsh’s and the Federal Open Market Committee’s (FOMC) plans. It links recent volatility to the Iran war but focuses on policy shifts. Warsh, sworn in about three months earlier, began with trailing 12-month inflation at a three-year high of 4.2%. The key disruption, the piece says, came Aug. 19 when Treasury Secretary Scott Bessent announced the Treasury would double purchases of long-dated Treasuries from $2 billion to $4 billion. The article notes that long-end yields had climbed, with the 30-year hitting a 19-year high and the 10-year nearing crisis-era levels, driven by inflation concerns, removal of forward-looking guidance by the Fed, and rising deficits exceeding $40 trillion.