The bond market delivered a sharp rebuke to new Federal Reserve Chairman Kevin Warsh on Wednesday, with yields on longer-term U.S. Treasurys surging to their highest levels in 19 years after he failed to convince investors of his commitment to raising rates to combat inflation.

The selloff was unusual and alarming: even as long-term yields jumped, short-term Treasury yields fell, signaling fears that the Fed would delay rate hikes and then be forced into aggressive tightening later. For Warsh, the action amounted to a warning shot early in his tenure.

While yields stabilized Thursday and many analysts still expect the Fed to respond appropriately to economic data, investors warned that any further reason to doubt the central bank would trigger a worse selloff—driving up rates on mortgages and corporate debt. Christopher Sullivan, chief investment officer at the United Nations Federal Credit Union, said failure to act when data warrants it would be "tantamount to disaster for the long end of the market."

Bond investors have rarely been alarmist about threats to the Fed's independence in recent years, but Wednesday's moves suggest patience is wearing thin.