Warsh’s Fed communications are driving Treasury-market volatility

Federal Reserve Chair Kevin Warsh wants bond investors to focus on changes in the US economy rather than central-bank commentary, but his appearances continue to move Treasury markets, Bloomberg reported.

The three largest daily moves in the US Treasury yield curve since Warsh became chair in May followed his appearances, including press conferences in June and July and his speech at the Fed’s Jackson Hole conference.

On Friday, the gap between two-year and 30-year yields narrowed by 10 basis points as traders increased bets on interest-rate hikes. Warsh also warned that inflation was not meaningfully slowing and said policymakers still had work to do.

Warsh has described the feedback loop between markets and Fed officials as a hall-of-mirrors problem. He has urged investors to focus on economic data rather than trying to anticipate policymakers’ remarks.

The market reacted differently to his July appearance, when the yield curve steepened by the most since August 2025 after investors said he had not explained why the Fed left rates unchanged. Fixed-income managers warned that the Fed’s reduced communication could produce further volatility.