Warsh Hawkish Speech Lifts Rate-Hike Bets on Wall Street
· Business · LiveMint, Wall Street Journal
Federal Reserve Chairman Kevin Warsh used his Jackson Hole speech in Wyoming to double down on his commitment to taming inflation that has run above the central bank's target for five straight years. Two-year Treasury yields jumped 12 basis points to 4.35% after his remarks, the biggest single-day move since his hawkish first post-meeting press conference in June. Traders increased bets on a quarter-point rate hike at next month's Fed meeting, the dollar rallied, gold fell, and 30-year yields were little changed. The speech came after long-dated Treasury yields had hit their highest levels since 2007, partly driven by an energy-price shock tied to the US war on Iran. Treasury Secretary Scott Bessent had announced plans to buy back bonds to slow the rise in yields, a move that stirred concerns about Washington trying to cap rates without addressing inflation or the budget deficit.
Why it matters
A Fed rate hike next month would tighten global financial conditions, strengthen the dollar, and ripple into Indian markets, currency, and oil costs at a time when yields are already near two-decade highs.
Read the original report — LiveMint
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.