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Bond Markets Divided on Warsh Fed's Rate Path as Inflation Signals Persist

Financial markets are sending mixed signals about the Federal Reserve's direction under new Chair Kevin Warsh. Bond traders are pricing in a rate hike this year, while some investment analysts see room for cuts. The 30-year Treasury yield topped 5.1% Friday, reflecting uncertainty over how aggressively the central bank will tackle persistent inflation concerns. Bond investors are betting Warsh will prioritize the Fed's credibility on inflation control rather than accommodate calls for lower borrowing costs. Fed Governor Christopher Waller's recent comments reinforced market expectations for tightening action. The divergence between market forecasts and some analyst views underscores the challenge facing Warsh as he balances combating elevated price pressures against broader economic headwinds.