Federal Reserve Chairman Kevin Warsh kept interest rates steady in a target range of 3.50% to 3.75% this week. The decision drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee.
Although taming inflation is the top priority of Warsh's tenure, he suggested a possible shift in how the central bank assesses inflation. His hesitancy to embrace higher borrowing costs and his stinginess with details during his press conference have raised anxiety among investors regarding less predictable policy.
The market responded with a jump in long-term Treasury yields as investors questioned whether Warsh will act forcefully enough to bring inflation down. These tensions put at stake his ability to lead a committee that is gradually losing patience with high inflation.