Fed’s Kashkari: Treasury Market Functioning Normally Despite Rising Yields

Kashkari is separating two things markets often blur: elevated yields as a price signal versus yields as a symptom of broken market plumbing. His read that functioning is intact, and that inflation expectations remain anchored, undercuts the argument that rising yields alone force the Fed's hand. The more consequential line is his willingness to flag more tightening than markets price, which puts the burden of proof on the disinflation trend rather than on Treasury market stress. Whether that gap between his September forecast and market pricing narrows is the open question.