Kevin Warsh’s Hawkish Inflation Stance Aims to Push Down 10-Year Treasury Yields, Analyst Says

Ed Yardeni, president and chief investment strategist at Yardeni Research, said Kevin Warsh was trying to reduce borrowing costs by talking tough on inflation and, if necessary, supporting interest-rate hikes to bring down government bond yields that influence mortgage and auto-loan rates. According to Jin10, Yardeni said he believed a new understanding had been reached between the U.S. Treasury and the Federal Reserve to keep the 10-year U.S. Treasury yield lower. He said U.S. Treasury Secretary Bessent and Warsh were working as a team and had persuaded U.S. President Donald Trump that the best way to lower borrowing costs was to take a hard line on inflation and raise rates if needed. Yardeni said lower bond yields would help stimulate the economy. The report also said Bessent recently acknowledged the bond market’s influence and Trump’s recognition of it. In a speech at the Economic Club of New York on June 23, Bessent said, “The bond market has toppled more governments than grenades.”