Sovereign debt, gold and Japan's yen all popped higher while European stocks and the euro fell back after reports Russian leader Vladimir Putin had updated Moscow's military policy and "nuclear doctrine". The revision said Moscow could respond with nuclear weapons if it was subject to a conventional missile attack that was supported by a nuclear power.
Given the gravity of that threat, the moves have been relatively modest so far - largely because Putin has repeatedly threatened the use of nuclear weapons ever since Russia invaded neighboring Ukraine a thousand days ago today.
Yet, for markets, the sudden retreat in Treasury yields - pumped up recently by Trump's tax and tariff plans, sticky inflation readings and pared-back Federal Reserve easing bets - was perhaps the biggest whiplash.
Two-year yields retreated to their lowest in 11 days while 10-year yields slipped back below 4.35%. And while that would typically knock the dollar back too, the safety bid - certainly against the euro - was enough to lift the dollar index more broadly.
But before Putin's latest move, Treasuries had already been slipping back from recent highs - in part because Warsh, a former Fed governor, has suddenly emerged as clear favorite in betting markets to get nominated for the top job at the Treasury.
The Polymarket online betting site put Warsh at 44% on Tuesday - almost 20 points clear of the second favorite, hedge fund manager Scott Bessent, and the third most-backed, Apollo Global Management chief executive Marc Rowan.
Warsh, a Visiting Fellow at the Hoover Institution of Stanford University, has a track record of hawkish views on both inflation and deficits and was White House economic policy adviser from 2002 to 2006 before being appointed to the Fed.
He left the central bank in 2011, a few months after joining his colleagues in unanimous support of expanding the Fed's bond-buying program - and then making public his reservations about expanding the Fed balance sheet.
