Wall Street strategists are closely watching the potential appointment of Kevin Warsh as chair of the Federal Reserve, believing it could disrupt the $31 trillion Treasuries market. Currently, US yields have risen by two to three basis points, maintaining a narrow trading range not seen since late 2020. The 10-year yield is now at 4.33%. With ongoing geopolitical tensions, particularly between the US and Iran, and the Fed expected to keep interest rates steady, the market is stable but cautious. Analysts from Morgan Stanley suggest that under Warsh, the Fed may adopt new inflation metrics and reduce forward guidance, which could increase market volatility. The bond market is also reacting to elevated oil prices, which could impact inflation and economic growth. Investors are anticipating a reading of the Fed’s preferred inflation gauge and are pricing in a quarter-point cut by December, which could further influence shorter-dated yields and steepen the yield curve.