US financial markets are closely watching the Federal Reserve's policy direction after the 30-year Treasury yield surged to its highest level in nearly 20 years, reflecting concerns that the Fed may not be tightening enough to control inflation. Fed Chair Kevin Warsh is facing intense pressure after the committee voted to hold the policy rate steady, even though inflation remains above the 2% target. At the latest meeting, three Fed officials dissented and supported an immediate rate hike. Investors view the rise in long-term bond yields as a sign that the market is demanding higher returns to compensate for the risk that inflation could stay elevated for longer if the Fed delays action. Additionally, Warsh signaled a review of the Fed's monetary policy framework, further adding to uncertainty about the future rate path. Meanwhile, the latest core inflation reading stands at 3.3%, significantly above the Fed's target. Analysts estimate that if upcoming economic and inflation data do not slow, the likelihood of a rate hike at the September meeting will increase, potentially impacting global equity markets, currencies, and capital flows.