Fed lifts the hawkish bar for BoE

As Warsh talked, short-term Treasury yields shot up to their highest since mid-2024, lifting the dollar to seven-week highs. Longer-dated bonds actually found relief in the Fed rediscovering its inflation-fighting religion, with the benchmark 10-year yield hovering below the critical 5% level.

That offered relief to stocks in Asia, with most share markets catching a bid. European bourses are set for a 0.5% rise at open, while Nasdaq futures lifted 0.6% and S&P futures added 0.5%.

The Fed's hike cranks up pressure on every other central bank, starting with the Bank of England today. Market watchers expect the BoE to hold steady, but the board is likely to split again so every syllable will be parsed for any hawkish hints that sticky energy prices could force its hand into a November hike.

The Bank of Japan is all but certain to lift its rate on Friday. And if you look around the world, the market assumes central banks in the U.S., Europe, Britain, Australia and New Zealand will all have to tighten policy again by the end of the year.