Analysis: Signs of uncontrolled US Treasury yields emerge as Waller faces major test

According to Odaily, the recent sharp fluctuations in the US Treasury market pose a significant early challenge for the incoming US Federal Reserve Chair, Kevin Walsh.

Subadra Rajappa, Head of Americas Research at Société Générale, stated in a Bloomberg TV interview on May 15 that expectations of accelerating inflation have led to clearly abnormal moves in bond yields.

Rajappa pointed out that the surge in energy prices triggered by the Iran war is worsening inflationary pressure in the US, which will constrain Walsh's ability to push for rate cuts—a policy direction previously supported by both himself and US President Trump. She remarked, "I'm starting to get a little worried because bond yields really seem somewhat out of control, and we should pay close attention to the signals the bond market is sending."

Expectations in the interest rate market have also shifted rapidly. According to data compiled by Bloomberg, traders currently see the probability of the Federal Reserve raising rates before December as close to two-thirds. As recently as February 27, the day before the US and Israel took military action against Iran, the market had generally been betting on more than two rate cuts this year. (Golden Ten Data)