DoubleLine: The Fed needs to raise interest rates to stabilize the bond market.

DoubleLine Capital's Jeffrey Sherman said the Federal Reserve needs to raise interest rates to convince traders of its commitment to pushing down inflation and to ease market concerns that drove the 10-year U.S. Treasury yield above 5% this week. The asset manager's deputy chief investment officer said in a Bloomberg Television interview that Fed Chair Kevin Warsh "has the ability to help tomorrow by raising rates." Sherman said, "The market is already pricing in rate hikesthey either act or shut up." Sherman also said the Fed needs to signal that further rate increases will follow a 25-basis-point hike on Wednesday. Doing so would reverse the policy easing brought about by the Fed's three rate cuts since September 2025. Swap traders have largely priced in a 25-basis-point hike this week and expect cumulative increases of about 0.95 percentage points by September 2027.