Wrong. They can set the Fed fund rate target anywhere they want. The same interventions that move the rate the target addresses toward the target also normally move other rates, including various Treasury rates, in the same direction, which is why Fed action on the Ged funds target is usually discussed as action on interest rates, not just the single rate the target nominally applies to.

> Any higher and we get a yield curve inversion and a recession[0].

Yield curve inversions (in any of the Treasury rates, not just the 30-year) are typically viewed as potential recession signals because they reflect an abnormal decoupling of usually-linked behavior representing broad insecurity with the investment opportunities in private markets. They are not viewed as causing recessions, and thus the 30 year Treasury rate is not a constraint on Fed funds targets.

Anywhere they set the Fed fund rate, there will be consequences, of one kind or another. The Fed is trying for the lest-bad set of consequences, and therefore their possible policy is severely constrained.

Sure, the “consequences of doing so” is how they choose where they want to set them.

The upthread suggestion that the 30yr Treasury rate puts an effective cap on target rates because a yield inversion will cause a recession (and, implicitly, Treasury rates are unresponsive to the policies that are used to achieve the Fed funds target) remains false and based on mistaking a symptom with a cause of recessions.

Should the Fed set interest rates arbitrarily? No, but that was not what was being discussed.