Rising bond yields are boxing in the Fed and chairman Kevin Warsh, which is bad news for borrowers, stocks, and anyone hoping for cheaper mortgages.

• Warsh is signaling he will keep raising rates until inflation is back under control, after years of the Fed moving too slowly.
• Bond investors are refusing to buy at today's rates because they expect higher ones later, which pushes yields up further.
• Much of the price pressure is coming from war damage to tankers and refineries, not strong demand, so the only way the Fed can cool it is by making everything too expensive to buy.
• Mortgages are headed past 7%, and higher costs across the board should force people to cut spending.
• Japan is raising rates alongside the US while Europe is not, leaving the EU looking the most fragile.

Outlook: Expect weak third and fourth quarter earnings with companies guiding lower, and stocks selling off as the squeeze hits over the next six months.