The 10-year Treasury yield is a crucial benchmark to watch, and its minimal reaction ('a basis point or two') suggests the market is taking a 'wait-and-see' approach to potential hawkish Fed appointments and not significantly changing long-term interest rate expectations.

The bond market's relatively calm reaction suggests major investors do not believe the situation will lead to a full-blown crisis, though a sharp rise in yields would be a major red flag.

The 10-year yield is expected to trend higher from its current level, as it has historically risen after the first Fed rate cut. This suggests a potential opportunity to short bonds.

The guest is bearish on bonds, expecting the 10-year yield to rise due to persistent inflation. A sustained move towards the 5% level is viewed as a major red flag for equity markets.