The bond market is warning that something is broken and that the Fed has done enough, market veteran Ed Yardeni says

• Inverted yield curves often indicate a coming credit crunch, the market veteran said.
• But while a broad lending shortage is unlikely, the Fed should not lift interest rates any further.
• The bond market also shows that investors are betting on moderating inflation rates.

The bond market is flashing a warning that the financial system is damaged, Ed Yardeni told Bloomberg TV, with bondholders continuing to bet on future turmoil.

That should have implications for the Federal Reserve's next moves, he added, restricting further interest rate hikes.