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Warsh’s Inflation Focus Weighs on Markets, Sends Treasury Yields Higher
Investors are reading Kevin Warsh’s first post-meeting press conference as hawkish, with yields on short-term Treasurys adding to earlier gains.
The yield on the 2-year Treasury note, which is particularly sensitive to the outlook for interest rates set by the Federal Reserve, was recently 4.174%, according to Tradeweb, up from 4.060% before the Fed’s policy decision at 2 p.m. ET.
Although Warsh reaffirmed his desire for the Fed to communicate less about the outlook for monetary policy, he was also adamant that the central bank needs to deliver on its 2% inflation target—an emphasis that investors have at least initially taken as a further sign that the central bank might soon raise interest rates.
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