Twenty-five years ago, I was finishing a prototype of this newsletter when the Sept. 11 attacks shattered our sense of safety. In the weeks that followed, the country came together. In a far less polarized era, leaders sought to bridge divisions rather than exploit them. I cannot help but wonder: How would we navigate such a crisis today?

The global bond sell-off has slowed, but soaring oil, inflation, and debt worries persist. The monthslong rout has laid bare an inconvenient truth: Quick-fix interventions look no match against so-called bond vigilantes. That could heap pressure on Treasury Secretary Scott Bessent and Kevin Warsh, the Fed chairman, as investors brace for a pivotal inflation report.

Bessent has said he has "a big tool kit" to bring down yields. Exhibit A: an enhanced bond buyback program. But the Treasury bought only $5.19 billion in long-dated bonds — below the $6 billion expected — and yields climbed. Bessent played down the ructions, telling Steve Bannon the Treasury market is "in very good shape." He also seemed to dare traders: "if some of the Bloomberg Terminal bros are unhappy, that's too bad."

"The Bond Vigilantes are daring Bessent to use the bazooka," analysts at Yardeni Research wrote. Raising interest rates next week would signal the Fed is serious about fighting inflation. The market is pricing in two Fed hikes this year, the first coming next week. Friday's Consumer Price Index report could increase those odds.