There’s a simple way the Fed could help calm the bond market

CNN Business01:33

Washington — Investors are increasingly worried about government deficits and persistent inflation, driving up the price of money. The Federal Reserve can ease some of those nerves. ...

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The Federal Reserve can ease some of those nerves.\n   ...</p>\n\n<a href=\"https://edition.cnn.com/2026/09/08/economy/fed-warsh-bond-market\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TYO","symbol_name":"3倍做空7-10年期国债ETF-Direxion","start_time":0,"source_url":"https://edition.cnn.com/2026/09/08/economy/fed-warsh-bond-market","article_id":"2666746183","we_media_id":null,"thumbnails":[],"rights":{"source":"cnn_highlight","url":"https://edition.cnn.com/2026/09/08/economy/fed-warsh-bond-market","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2666746183","pubTimestamp":1788888837,"columns":[],"sourceInfo":{"source_id":"cnn_highlight","name":"CNN Business"},"weMediaInfo":null,"summary":"Investors are increasingly worried about government deficits and persistent inflation, driving up the price of money. 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Eccles Federal Reserve Board Building is s","collect":0,"end_time":0,"defaultTopTitle":"cnn.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TYO":"3倍做空7-10年期国债ETF-Direxion","BSV":"短期国债指数ETF-Vanguard","FAZ":"三倍做空金融ETF-Direxion","SHY":"债券指数ETF-iShares Barclays 1-3年国债","JPST":"JPMorgan Ultra-Short Income ETF","KBE":"银行指数ETF-SPDR KBW","HYG":"债券指数ETF-iShares iBoxx高收益公司债","BIL":"债券指数ETF-SPDR Barclays美国1-3月国债","LIAJ":"LifeX 2053 Inflation-Protected Longevity Income ETF","DBND":"DoubleLine Opportunistic Bond ETF","SHV":"美国短期国债ETF-iShares","UUP":"美元ETF-PowerShares DB","TBIL":"US Treasury 3 Month Bill ETF","UDN":"做空美元指数-PowerShares","TIP":"通胀债券指数ETF-iShares Barclays","BOXX":"ALPHA ARCHITECT 1-3 MONTH BOX ETF","TLTW":"iShares 20+ Year Treasury Bond Buywrite Strategy ETF","VGSH":"美国短期国债ETF-Vanguard","LQD":"债券指数ETF-iShares iBoxx投资级公司债","JPIE":"JPMorgan Income ETF","GOVT":"iShares安硕核心美国国债ETF","GOLY":"Strategy Shares Gold Enhanced Yield ETF","GBIL":"Goldman Sachs Access Treasury 0-1 Year ETF","MUB":"美国市政债ETF-iShares","VCSH":"美国短期公司债-Vanguard","VGIT":"中期国债ETF-Vanguard","OOQB":"One+One Bitcoin and Ether ETF","ZROZ":"PIMCO 25+ Year Zero Coupon U.S","MYCN":"SPDR SSGA My2034 Corporate Bond ETF","TLH":"iShares安硕10-20年国债ETF","BNDW":"Vanguard Total World Bond ETF","WAMA":"WisdomTree U.S. Adaptive Moving Average Fund","XBIL":"US Treasury 6 Month Bill ETF","SCHO":"嘉信短期美国国债ETF","PBDC":"Putnam Bdc Income ETF","MINT":"PIMCO Enhanced Short Maturity Exchange-Traded Fund","NGHT":"Nicholas Bitcoin and Treasuries AfterDark ETF","USHY":"iShares Broad USD High Yield Corporate Bond ETF","BOND":"Pimco Total Return ETF","VCIT":"美国中期公司债-Vanguard","EDV":"美国延期国债ETF-Vanguard","VGLT":"美国长期国债ETF-Vanguard","TBT":"债券20+美国债指数ETF-ProShares两倍做空","UITB":"VictoryShares Core Intermediate Bond ETF","UBT":"债券20+美国债-ProShares两倍做多","AGG":"债券指数ETF-iShares Barclays综合国债","TMF":"3倍做多20年期以上国债ETF-Direxion","SKRE":"TUTTLE CAPITAL DAILY 2X INVERSE REGIONAL BANKS ETF","IEI":"iShares Barclays 3-7 Year Trea","BND":"债券指数ETF-Vanguard美国"},"translate_title":"美联储有一个简单的方法可以帮助平息债券市场","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LIAJ":1.5,"AGG":1.5,"TLH":1.5,"BSV":1.5,"GBIL":1.5,"SCHO":1.5,"BNDW":1.5,"PBDC":1.5,"TBIL":1.5,"VCSH":1.5,"KBE":1.5,"SKRE":1.5,"USHY":1.5,"UUP":1.5,"IEI":1.5,"WAMA":1.5,"JPST":1.5,"TLTW":1.5,"JPIE":1.5,"ZROZ":1.5,"FAZ":1.5,"MUB":1.5,"UITB":1.5,"GOVT":1.5,"TIP":1.5,"EDV":1.5,"UBT":1.5,"VGIT":1.5,"MINT":1.5,"HYG":1.5,"GOLY":1.5,"BOND":1.5,"VGSH":1.5,"BIL":1.5,"DBND":1.5,"SHV":1.5,"BND":1.5,"XBIL":1.5,"TMF":1.5,"BOXX":1.5,"TYO":1.5,"MYCN":1.5,"OOQB":1.5,"VCIT":1.5,"VGLT":1.5,"TBT":1.5,"NGHT":1.5,"SHY":1.5,"UDN":1.5,"LQD":1.5},"content_text":"Washington — \n\n\n            Investors are increasingly worried about government deficits and persistent inflation, driving up the price of money. The Federal Reserve can ease some of those nerves.\n    \n\n            The conflict in the Middle East intensified last week, pushing up energy prices again and forcing heavily indebted countries to borrow more to increase defense spending and fund the war. That deepened a global rout in the bond market, sending yields to multi-year and multi-decade highs. Higher yields raise borrowing costs for consumers for everything from mortgages and credit cards to the US government’s $40 trillion debt.\n    \n\n            Fed Chairman Kevin Warsh has been mostly silent on where he believes interest rates could be heading. However, in a major speech last month at an economic symposium in Jackson Hole, Wyoming, Warsh gave markets a hint, saying there was more “work to do” in fighting inflation — a signal that rate hikes could be around the corner.\n    \n\n            Investors welcomed Warsh’s Jackson Hole speech, underscoring how keen they are to get more clarity on his economic views. Fiscal concerns and a flood of corporate borrowing to fund the AI build-out are the biggest drivers of the surge in yields. But greater transparency from Warsh could be an important source of stability for the bond market — and a much better alternative to the central bank deploying its massive $6.7 trillion balance sheet to control yields, as it did during the Great Recession and World War II.\n    \n\n            “The Fed’s responsibility is confined to just controlling inflation and if Warsh can just explain policy better in the next few months, then that source of anxiety is likely to ease,” Derek Tang, a policy economist at Monetary Policy Analytics, told CNN. “But the Fed does have firepower with its unlimited balance sheet.”\n    \n\n            US Treasury yields ticked slightly higher on Tuesday as traders monitored oil prices and geared up for inflation data set to be released later this week. After surging last week, yields were steadier this week. The 10-year yield traded at 4.79%, near its highest level since 2025 and on the cusp of its highest level since 2023.\n    \n\n        The benefit of transparency\n\n\n            Warsh has said repeatedly that the Fed is committed to its 2% annual inflation target. But that hasn’t been enough to reassure bond investors.\n    \n\n            Shortly after Warsh held a news conference following the Fed’s July monetary policy meeting, long-term bond yields surged. That was likely a reflection of doubts about the Fed chairman’s commitment to taming inflation, an adjustment period to a quieter Fed, or simply expectations for future rate hikes.\n    \n\n\n\n\n\n\n\n\nThe Marriner S. Eccles Federal Reserve Board Building is seen under construction on August 13, 2026 in Washington, DC.\n\nAlex Wong/Getty Images\n\n\n\n\n\n            But Warsh has not provided what’s known as a “reaction function,” which is the central bank’s explanation of “what it is watching, how it interprets the economy, how it weighs competing risks, and what developments would change its judgment,” according to the Brookings Institution.\n\n\n            While Warsh didn’t flesh out a reaction function in his Jackson Hole speech, his signal that rate hikes may be coming was a step in the right direction.\n    \n\n            “Warsh needs to continue to refine how he communicates with markets,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Part of that is providing assurance that policymakers will take policy action in a reasonable time frame.”\n    \n\n            Markets see a roughly 60% chance the Fed will raise rates at its meeting next week, underscoring the persistent uncertainty on Wall Street. That would mark the first rate increase in more than three years. Investors expect at least one more rate hike by year’s end, but the timing remains unclear.\n    \n\n        A nuclear option\n\n\n            But the Fed does have an unconventional tool to influence long-term yields: Its balance sheet. Yet it is highly unlikely the central bank will use it.\n    \n\n            “The Fed has the ammo to be much more impactful on the level of interest rates by introducing quantitative easing,” said Mike Goosay, chief investment officer and global head of fixed income at Principal Asset Management. “But I don’t think that’s going to happen.”\n    \n\n            In response to the Great Recession, the Fed massively expanded its balance sheet by buying up bonds and mortgage-backed securities to inject money into the financial system and stimulate the economy at a time when interest rates were already near zero. Warsh, who was a Fed governor during that period, said he supported the first round of quantitative easing, or QE, as an extraordinary emergency measure.\n    \n\n            But officials later introduced two more rounds of QE, which succeeded in stabilizing markets and aiding an economic recovery. But it prompted Warsh to resign. At the time, Warsh described the Fed’s large-scale asset purchases as “reverse Robin Hood,” arguing that it benefited wealthy asset owners while hurting everyday households. Since becoming Fed chairman, Warsh has stressed that the central bank must go back to basics, making it highly unlikely that he would support QE this time around.\n    \n\n            That wasn’t the only time the Fed has used its balance sheet to influence long-term borrowing costs.\n    \n\n            “In World War II, the Fed thought it had a duty to support the war effort, so it used its balance sheet to hold down bond yields to make sure that the government could spend more,” Tang said. “But we’re not in a world war right now.”\n    \n\n            The Fed did this by setting a fixed low price for Treasury bills and long-term bonds, then bought all the bonds that private buyers did not want — all while keeping short-term interest rates low.\n    \n\n            But this policy came at a cost: The Fed effectively surrendered its independence, making it harder for policymakers to tame inflation. That arrangement ended with the 1951 Treasury-Fed Accord, which restored the central bank’s independence from the Treasury.\n    \n\n            Warsh has said the Fed’s independence is essential — and that matters for the bond market. If investors believe that the Fed is willing to make unpopular monetary policy decisions to control inflation, they are more likely to have trust in its commitment to price stability.\n    \n\n            Ultimately, convincing investors that it will act to keep inflation under control is the simplest tool the Fed has to calm the bond market.\n    \n\nCNN’s John Towfighi contributed reporting.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"isLaohu8Offline":false,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.49.0","shortVersion":"4.49.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2666746183","isCrawlerRequest":true}