It’s one thing when the titans of banking come out in unison to defend the Federal Reserve’s independence, as we saw last week. It’s another thing entirely when the market itself gives you a real-time, second-by-second readout of its anxiety. The recent flurry of headlines about our fictional President potentially firing the Fed Chair gave us a perfect case study, and the lesson wasn’t in the stock market’s dramatic gymnastics, but in the quieter, more stubborn moves in the bond market.

To see this clearly, we need to look at a fascinating corner of the financial world: prediction markets. Think of them as regulated betting parlors for major events. These are financial contracts, often called binary futures, where you bet on a “yes” or “no” outcome. If you’re right, you get a dollar; if you’re wrong, you get nothing. On Thursday, a contract betting on the Fed Chair’s dismissal became the hottest ticket in town.

As the odds in this prediction market spiked, hitting an intraday high of 40%, the stock market did exactly what you’d expect: it dove. The S&P 500 fell in near-perfect opposition to the rising odds of a firing. But then, something interesting happened. By the end of the day, the stock market had shaken off its fears, recovering all its losses to close near the day’s highs. A casual observer might think it was all just a bit of temporary drama.

They’d be wrong.

To find the real story, you have to look at the 30-year Treasury yield. Unlike stocks, bond yields rose right alongside the prediction market odds—and they didn’t come back down. While the S&P 500 was celebrating its recovery, the 30-year yield remained stubbornly elevated above the critical 5% level.

This is the market’s version of a Freudian slip. The stock market, with its notoriously short attention span, might have moved on. But the bond market—often called the “smart money”—is signaling that some damage may have been done. Persistently higher yields mean higher borrowing costs for the government, for corporations, and ultimately for consumers. It’s a sign that bond investors are demanding a higher premium to compensate for potential instability and the risk that monetary policy could become a political football.

While these prediction markets are interesting—and likely to grow in popularity—their real value isn’t always in predicting the future. This week, their greatest contribution was acting as a magnifying glass. They helped illuminate the deep-seated anxiety in the part of the market that truly cares about long-term stability. The stock market may have voted for blissful ignorance, but the bond market is telling us it’s worried, and it’s not over it yet.