The Bond Market's Trust Test for Kevin Warsh The Federal Reserve Chairman's speech at Jackson Hole has been widely interpreted as a victory for his hawkish stance on inflation.
However, it may be too early to tell if this is more than just a carefully managed display of market acquiescence.
Warsh's comments about high levels of inflation and the need for restrictive financial conditions sent shockwaves through the bond market, with yields on short term government debt surging to their highest level in five weeks.