Market participants gave Fed Chair Warsh’s second press conference two thumbs down. If he is serious about taking guidance from market prices rather than dishing it out, a course correction is in order. That would point to rate hikes this autumn, leading to a flatter US yield curve and a stronger dollar – which is our central forecast. But if renewed concerns around the Fed’s independence and commitment to sound money are allowed to fester, higher term premia and a weaker dollar may follow.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.
