Wall Street is panicking over Kevin Warsh’s patience

Kevin Warsh, in his second press conference as Fed chairman, gave the bond market credit for doing his tightening for him. Within the hour, it went further, and made clear what it thought of his decision not to raise rates. The 30-year treasury yield surged 10 basis points to 5.21%, its highest level in 19 years, while the 10-year—important for the mortgage market—climbed seven basis points, to 4.67%. However, the 2-year actually fell four basis points. The reason why is because traders were backing off the odds of an imminent hike, and simultaneously demanded more compensation to hold longer government debt, believing that inflation would continue to bite. Equities also took the press conference badly. After a brief surge in the initial announcement, the Dow Jones Industrial Average fell