When doves cry ... "inflation"

San Francisco Fed President Janet Yellen just gave a speech to a business group in Idaho. She's one of the biggest "doves," or easy money types, on the Fed. But this time, she cried out the following: "The bottom line is this. With inflation too high, policy must have a bias toward further firming."

Now granted, she also defended the Fed's pause and said a slowing economy should bring down inflation. But this sure doesn't look like the kind of gentle talk Wall Street was looking for. And remember: The bond market is priced for perfection. Anything less (i.e. Fed language, like Yellen's, that signals rates will NOT be cut anytime soon) COULD lead to a big sell off in Treasuries. We'll see.