Bond investors are demanding higher payouts because they think inflation is worse than the Fed admits, which is bad news for the government and for anyone hoping rates come down.

• Short-term Treasury yields are rising as investors bet rates stay high for longer.
• Kevin Warsh has stopped telling markets what the Fed plans next, and investors want extra payment for that uncertainty.
• Several Fed members still want higher rates, adding to the pressure.
• The government has to refinance roughly $8 trillion of debt in the next year, right when buyers for its bonds are getting scarcer.

Outlook: If demand for Treasuries keeps thinning, borrowing costs stay high and the pressure on the government's finances grows.