What Just Changed

Our previous coverage tracked the global bond selloff as an abstract pressure building across G7 markets. Now it has specifics.

On Friday, May 15, the 30-year Treasury yield hit 5.114%, according to CNBC — the highest since May 22, 2025, and closing in on levels not seen since October 2023. The 10-year yield surged 11 basis points to 4.575%. The 2-year hit 4.075%.

These are borrowing costs for everything — mortgages, car loans, business debt, the U.S. government itself.

The Inflation Numbers Are Worse Than Last Week

The Survey of Professional Forecasters, the blue-ribbon panel polled quarterly by the Federal Reserve Bank of Philadelphia, now projects CPI hitting 6% in Q2 2026. Three months ago, that same panel forecast 2.7%. According to CNBC, that's nearly a 3.3 percentage point revision in a single quarter.

For the full year, they're projecting 3.5% headline CPI and 2.9% core. Headline PCE — the Fed's own preferred measure — is projected at 4.5% for Q2, with core at 3.4%.

Those numbers came on top of what already landed this week: CPI at 3.8%, the highest since May 2023. Producer prices at 6% annual rate, the highest since December 2022. Import prices up 4.2% year-over-year, the most since October 2022, according to the Bureau of Labor Statistics.

Oil is driving a lot of this. WTI crude hit $104.39 a barrel on Friday, up $3.22. Brent hit $108.30, up $2.58. The Middle East conflict is continuing to intensify, and that energy shock is now visible in every price index the government publishes.

Warsh Steps Into the Wreckage

Kevin Warsh was confirmed by the Senate on Wednesday. By Friday morning, the bond market was already testing him.

Société Générale called the yield environment "unhinged," per Bloomberg, framing it as an early and immediate test for the new Fed chair. Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, wrote in a morning note cited by CNBC: "Long end rates are now in control of monetary policy." He added: "I wish Kevin Warsh the best... but he will still be subject to his surrounding macro circumstances."

The bond market doesn't care what the new chair wants.

Trump is still publicly pushing for rate cuts. That pressure is real. But the data says the opposite of cuts is warranted. Warsh is caught between a president who wants cheaper money and a bond market screaming that money is already too cheap.

The Trump-Xi Summit Flopped

Markets were hoping the Beijing summit would produce something — a ceasefire signal on Iran, a trade breakthrough, anything. It didn't.

According to CNBC, the two sides agreed the Strait of Hormuz must remain open. China agreed to buy 200 Boeing jets, 50 more than previously anticipated. Traders were unimpressed — Boeing fell another 2% Friday after dropping nearly 5% Thursday.

Adam Crisafulli of Vital Knowledge called the summit headlines "underwhelming." Mike Sanders, head of fixed income at Madison Investments, told Reuters via Global Banking & Finance Review: "We expected more out of the meeting in China with Trump and it didn't seem like there was much progress made in terms of the outcome in the Middle East, and so oil's backing up again."

No Iran resolution. No meaningful energy relief. Bond traders drew the obvious conclusion.

Stocks Took the Hit

The S&P 500 shed 0.9% Friday. The Nasdaq lost 1.3%. The Dow dropped 407 points, according to CNBC.

Intel fell 6%. AMD dropped 3%. Micron lost 5%. Nvidia shed 3% — this after adding 20% since May 5 on China chip-sale optimism. The iShares Semiconductor ETF was on pace to snap a six-week win streak, per CNBC's Jim Cramer.

The divergence is stark: Thursday the S&P 500 closed above 7,500 for the first time. The Dow reclaimed 50,000. Then Friday happened.

Ben Emons of Highline Wealth Partners described the dynamic to CNBC: "Fiscal dominance involves large deficits, heavy Treasury issuance, a rising interest expense burden, and the market's sense that fiscal policy overwhelms monetary policy." Washington's spending is breaking the Fed's ability to control inflation.

What Mainstream Coverage Is Missing

Most financial media is treating this as a "yield spike" story. It's a credibility story.

The Conference Board sees prolonged inflation and the Fed holding steady, per Bloomberg. The Survey of Professional Forecasters sees 6% CPI in Q2. The bond market is pricing in something close to that. And meanwhile, the White House is pushing the new Fed chair to cut rates.

That conflict — between fiscal reality and political pressure — is the actual story. Warsh doesn't just face bad data. He faces a president actively working against the policy the data demands. Mainstream coverage has largely sidestepped this.

Also underreported: UK gilt yields hit levels not seen in nearly three decades, according to CNBC. Japan's 2-year yield spiked 19 basis points before pulling back. Germany's Bund yields rose 7 basis points on the day, 11 on the week. This is a global problem.

What It Means for You

A 30-year Treasury at 5.1% means mortgage rates are going up, not down. Business borrowing costs rise. The national debt gets more expensive to service by the day. And with Q2 inflation now projected at 6%, real wages are being eroded.

The AI stock rally can paper over a lot of this for a while. But Dirk Willer, head of global macro strategy at Citi, said to CNBC: "A break of key levels may lead to steepening, which could coincide with a moderate SPX pullback."

Bond traders are processing a reality Washington is not yet acknowledging.