2-year Treasury yield jumps as Warsh says Fed may 'have work to do'

JUST IN: The 2-year Treasury yield jumps after new Fed chair Kevin Warsh warns the central bank may 'have work to do' on inflation in his Jackson Hole debut, lifting September rate-hike odds to 46%.

The two year Treasury yield just jumped six basis points, and it took one sentence to do it.

Kevin Warsh made his Jackson Hole debut as Fed chair today, and he did not come to soothe anybody. He said this summer's inflation readings, better as they were, don't tell him the underlying trend has meaningfully improved. And then the line that moved the market. Otherwise, we have work to do. That's central banker for a hike is on the table.

Traders heard it instantly. The odds of a September rate hike went from thirty five percent yesterday to nearly forty six percent today. The two year, the maturity that lives and dies on Fed policy, popped to 4.3 percent. The thirty year actually eased a touch, which tells you the long end likes an inflation fighter even when the short end is bracing for pain.

So here's where we sit. A brand new Fed chair used his very first Jackson Hole speech to tell markets he might raise rates, and half the market now believes him.

This is Sara White, reporting for HIT.