Treasury Market Is Telling Kevin Warsh Rates Need to Be Higher

The $31 trillion Treasury market sends an unequivocal signal to Kevin Warsh's Federal Reserve: rates are not high enough. Yields on policy-sensitive U.S. two-year notes rose to their highest level in more than a year after a trove of economic data led traders to price in at least one policy move. The move underscores how the bond market monitors policy paths and reacts quickly to data, even before official Fed communications. Analysts and investors will watch how this translates into expectations for rate trajectories and the resilience of the yield curve. The size and influence of the Treasury market mean its signals can shape borrowing costs and asset pricing across markets, intensifying scrutiny on future policy steps as the data flow continues.