earlier this year the fed quietly ended QT and began "reserve management" so they're buying the front end and letting the long end do its thing.

then in steps kevin warsh... historical backdrop: warsh resigned from the fed in 2011 because the fed owned too many assets. since then the fed bought 4 trillion more more than doubling the size of the fed balance sheet

warsh wants to shrink the balance sheet. only way to do that is to buy less treasuries, but the only reason 30 year mortgage isn't >15% is because the fed is the biggest buyer of long dated treasuries and mortgage backed securities (as in MBS i.e. the paper not the prince) since 2009...

so if warsh gets what he wants the long end is guaranteed to spike

then you add in the executive branch trying to to re-engineer the current account balance w the mar-a-lago accord and the correct reaction is not "wow rates are high" its "wow its kind of amazing rates are as low as they are in the long end", especially with the private markets gulping down as much gpu collateralized debt as it can without dislocating a jaw...