Strategists at major market maker Citadel Securities were among those who had predicted that Warsh would pull the trigger and hike rates. After all, at the end of his first meeting in June, Warsh had noted inflation concerns and that the picture had worsened due to the recent escalation in the ongoing Iran war. Tough loveWarsh said the recent spike in long-term Treasury yields was, in part, a healthy side effect of his new regime. And, notoriously, the Fed faced “bond-market vigilantes” back in the 1970s and 1980s when markets forced the central bank to focus on inflation by driving up Treasury yields. If the rise in Treasury yields on Wednesday was anything to go by, the bond vigilantes may be back.