Federal Reserve Chair Kevin Warsh said inflation remains too high, signaling the central bank may have to raise interest rates. Warsh, who took over from Jerome Powell on May 22, has drawn market attention for how he will approach tightening. The Fed’s next meeting is scheduled for September 15-16, and inflation was 3.7% in July. Powell had responded to inflation that hit 9.1% in 2022 with aggressive rate increases and said the move would bring pain to consumers and businesses.

U.S. bond yields have jumped as the war with Iran pushed up oil prices and revived investor worries about inflation and government deficits. The 10-year Treasury yield briefly topped 4.70% before slipping back to 4.65%, up from 3.97% before the conflict began in late February, while 30-year fixed mortgage rates climbed to near a one-year high. Longer-dated yields have also risen sharply, with the 30-year Treasury yield moving well above 5%. Uncertainty about the Federal Reserve’s next steps after Chair Kevin Warsh offered little guidance has added to the pressure at the long end of the curve.