Equity markets are rallying, the 2-year Treasury yield is dropping, and the price of gold is up 7% in just a couple of days.

Fed Chairman Warsh has said he is open to a rate hike if inflation surprises to the upside. While the jury is still out, the odds of that happening don't look particularly high. Meanwhile, longer-term inflation expectations are coming down. In addition, Warsh made it very clear during the last FOMC press conference that he strongly believes higher bond yields have helped — via @jsblokland

Fed Chairman Warsh has said he is open to a rate hike if inflation surprises to the upside. While the jury is still out, the odds of that happening don't look particularly high. Meanwhile, longer-term inflation expectations are coming down.