New Fed Chair Kevin Warsh faces 'doom loop' of debt and inflation. What's going on in the bond market?

Kevin Warsh’s ascent to Fed chair comes as Treasury yields surge on inflationary pressures from the Iran war, tariffs and large federal borrowing — a dynamic the articles say could force the Fed to keep policy tight or even raise rates. Long-term yields (10‑ and 30‑year Treasuries) have climbed into the mid‑4% to low‑5% range, lifting mortgage rates (30‑year fixed ~6.65%) and increasing interest costs on the $39 trillion national debt. That “doom loop” — higher yields → bigger deficits → more issuance → still-higher yields — risks crowding out spending and pressuring markets. The pieces note limited Fed options: Warsh can tighten via rate guidance or balance-sheet runoff, but fiscal policy ultimately influences long-term rates. Consumers face higher mortgage, auto and credit costs, while savers see improved short-term yields. Overall, the outlook raises downside risks for risk assets if yields remain elevated and fiscal strains intensify.