That’s the highest in 19 years and 22 years respectively.
Today, long-term yields hit the highest levels in decades.
Chart yields are from a bit earlier today, with yields now slightly lower.
The is 4.991 percent as I type with the at 5.361 percent.
Mish on Zandi Yesterday
Bianco on Zandi Today
Bianco Part 2-3
Bianco Part 4-5
Bianco: “If it doesn’t cut tomorrow, it risks the market continuing to reject this easy policy; yields could soar.”
I believe he means “If it doesn’t hike tomorrow, it risks the market continuing to reject this easy policy; yields could soar,” and that is what I stated as well.
The Fed is woefully behind the inflation curve and the AI-bubble curve, once again blowing bubbles.
The Fed Will Get the Blame
When something bad happens, and it will eventually, everyone will blame Warsh.
But the policy error is as Bianco stated.
“The Fed made the mistake two years ago by cutting rates, and the market has been rejecting it through higher yields from to 30-year.”
Political Realities May Force the Fed to Hike in September
On August 31, 2026, ahead of the , I commented Political Realities May Force the Fed to Hike in September
It will be a stretch for the Fed to pause for many reasons, not just the CPI.
Even if the report is weak, a headline CPI of 0.4 percent will be hard for the Fed to ignore.
Politics is another huge hurdle that will force a hike sooner rather that later.
Jim Bianco’s tracking model places the FOMC in a rigid 5-5 gridlock, thrusting former Chair Jay Powell out of the background and directly into the role of the ultimate swing vote.
……
Conclusion: The Strategic Imperative for September
The upcoming September meeting represents the Fed’s cleanest and most viable window to execute. [It will not want to hike in October, days before the election]
Unless the jobs report is miserable and the CPI is tame, look for Warsh to hike rates in September.
To avoid any look of politics or uncertainty, I think Bianco will be wrong on the number of dissents, say three or less.
The Fed hikes tomorrow. We will find out the number of dissents. My guess now is no more than two.
Regardless, Bianco and I are on the same side of the fence, for the same reasons.