U.S. Treasury yields are experiencing significant volatility, posing an early challenge for incoming Federal Reserve Chair Kevin Warsh. Subadra Rajappa, Head of Americas Research at Société Générale, highlighted that rising inflation expectations, fueled by energy price surges due to the Iran conflict, are constraining Warsh's ability to implement rate cuts—a policy he previously supported and that President Trump has demanded. Market sentiment has shifted dramatically, with Bloomberg data indicating a nearly two-thirds probability of a Fed rate hike before December. This marks a stark contrast to February 27, when markets anticipated more than two rate cuts for the year, prior to the U.S. and Israel's military action against Iran.