The US bond market has recently experienced significant volatility, with the 10-year Treasury yield rising by more than 20 basis points in just a few trading days, marking its largest weekly increase in nearly two months. Investors generally hope that the Federal Reserve will raise interest rates. Economist Ethan Harris points out that market skepticism regarding Federal Reserve Chairman Kevin Warsh's policy implementation is rising. As the former chief economist for North America at Bank of America Securities, Harris has long tracked the evolution of the Fed's policy framework, and his views have significant influence among institutional investors on Wall Street. Short-term interest rate trends indicate strong expectations of rate hikes, while long-term interest rates reflect concerns about the Fed's willingness to deliver on its promises. This trend has practical implications for ordinary investors, as interest rate changes directly affect bond prices, borrowing costs, and asset allocation, and can even be transmitted to various corners of the real economy through mortgage rates and corporate financing costs. Harris first addressed a previous viewpoint that criticized bond traders for over-reliance on Federal Reserve guidance, arguing that professional investors should independently assess risks and returns and not regard the central bank's verbal commitments as the sole anchor for investment decisions. Harris believes this criticism overlooks the importance of clear policy communication during periods of high inflation uncertainty. In an environment where inflation expectations are not fully anchored, every word from the central bank can become a catalyst for market repricing, and vague communication can exacerbate rather than smooth volatility. The bond market adjustment that occurred on the so-called "Fed meeting day" was not due to Warsh's refusal to provide forward guidance. In fact, the shift in communication style was implemented as early as six weeks prior at Warsh's first meeting after taking office, when long-term yields showed almost no significant fluctuations, indicating that the market had already priced in this change. The real trigger for this adjustment was not the communication style itself, but the widening gap between hawkish rhetoric and actual actions. The decision-making environment at the June meeting was relatively relaxed. The Fed removed statements implying a policy inclination towards easing, which was unanimously approved—a rare occurrence in recent Fed meetings, demonstrating a high degree of consensus among policymakers on their anti-inflation stance. Meanwhile, Warsh repeatedly reiterated his firm commitment to maintaining the 2% inflation target, even using weighty phrases like "at all costs" in his post-meeting public remarks. The market interpreted this as a signal that policymakers were willing to take tightening measures if necessary, thus reducing policy uncertainty to some extent. Long-term yields remained stable, and the yield curve maintained a relatively normal shape, without any significant widening of the inversion. The situation changed significantly in July. Market expectations for an interest rate hike had intensified, with federal funds rate futures pricing showing traders predicting a 25 basis point rate hike at the September meeting would climb to over 70%. Investors were highly focused on whether the Fed would release a clear policy signal. Against this backdrop, Warsh continued his hawkish stance but failed to provide a concrete action plan. He neither specified the timing of the next rate hike nor mentioned specific economic data thresholds that would trigger one. The market interpreted this as rhetoric replacing actual action, rather than a valid forecast of future rate hikes. Coupled with factors such as inflation remaining above target and a resilient labor market, the latest core PCE price index still reached 2.7% year-on-year, non-farm payrolls have exceeded expectations for three consecutive months, long-term yields have risen significantly, bond market volatility has intensified, and the ICE Bank of America Treasury Volatility Index (MOVE) has risen to its highest level this year. Harris emphasized that the current market operation is in line with its basic function. Short-term interest rates indicate that the Fed has the necessity and a high probability of raising interest rates; long-term interest rates, on the other hand, raise questions about Warsh's determination to implement a tough policy. This divergence between short and long-term rates is essentially the market's differentiated pricing of "policy will" versus "policy capability." Although many factors influence the bond market, including the widening fiscal deficit, overseas central banks reducing their holdings of US Treasury bonds, and changes in inflation expectations, Warsh's policy credibility has recently become the dominant variable, with each of his public statements influencing the shape of the yield curve with far greater force than before. For ordinary investors, this divergence has direct implications. If the Federal Reserve fails to demonstrate its commitment to combating inflation through actual interest rate hikes, long-term interest rates may remain high or fluctuate further, thereby increasing financing costs. The 30-year fixed mortgage rate could break through the 7% mark again, and corporate bond issuance costs will also rise accordingly, impacting the performance of bonds and balanced assets. Long-duration bond funds may face further net asset value decline pressure. Conversely, if subsequent policy actions align with its statements, market uncertainty is expected to decrease, the interest rate path will become clearer, and risk assets may see a window of opportunity for valuation repair. Before policy credibility is fully validated, investors will continue to demand higher risk compensation, meaning that term premiums may continue to remain above historical averages. Overall, the bond market's reaction is not an emotional outburst, but a normal manifestation of the price discovery mechanism. Trillions of dollars are voting on the policy path with real money every trading day; this collective wisdom is often better at capturing changes in risk than any single model. When paying attention to the Federal Reserve's statement, investors should observe the consistency between policy statements and actual actions. It is recommended to combine the federal funds rate decision, changes in the dot plot, and the wording of the press conference for cross-verification in order to more accurately assess the impact of the interest rate environment on their own asset allocation, maintain appropriate flexibility in duration management and credit risk exposure, and avoid over-betting on a single direction before the policy turning point arrives.