"However, some historical comparisons suggest that a tightening cycle started today may not get far before the Fed is forced to turn back. Consider that, if the Fed hikes this month, it will be the flattest yield curve to start a tightening cycle since 1965. Ordinarily, a positively sloped curve might suggest that markets expect higher policy rates ahead. But once term premium is accounted for, as we will see below, effectively none of today's positive 3m–10y slope remains to reflect higher expected short rates. A relatively flat curve could therefore be signaling that today's tightening will eventually give way to tomorrow's easing—that Warsh has little runway to fight inflation without undermining growth." https://alphabetasoup.substack.com/p/warshs-narrow-runway