Kevin Warsh has to pick a side in the bond-market battle

For roughly a decade, markets shrugged off deficits. No more. Resurgent debt worries were the backdrop to Treasury Secretary Scott Bessent’s unusual bond market intervention last week. But his firepower to buy back long-term bonds is inherently limited by the huge federal deficit. This has made Bessent the subject of some well-deserved criticism, including from his former mentor and hedge-fund legend Stanley Druckenmiller. Kevin Warsh, another Druckenmiller protégé and Bessent ally, is about to step into this storm. The Federal Reserve Chairman’s address this Friday at the Jackson Hole summit could bring yields back down, or send them higher. To…