The Bond Vigilantes' Unspoken Agenda The recent surge in 30 year Treasury yields has raised eyebrows among market observers.
However, the trend is less about the Federal Reserve's inability to control inflation than it is about the Fed's deliberate decision to cede some authority to markets.
In a speech on Wednesday, Chairman Kevin Warsh praised the "markets" for doing some of the Fed's job, effectively acknowledging that the central bank relies on bond vigilantes – investors who push government borrowing costs higher by demanding better returns – to do its dirty work.