Kevin Warsh’s first policy meeting as Federal Reserve chair is being met with a sharp repricing in markets, where traders now assign a meaningful probability to an interest-rate increase rather than a cut, as inflation proves stickier than expected.
Kevin Warsh’s first policy meeting as Federal Reserve chair is being met with a sharp repricing in markets, where traders now assign a meaningful probability to an interest-rate increase rather than a cut, as inflation proves stickier than expected.
Over here the same repricing is showing up in SONIA swaps — the market’s quietly binned most of the cuts it had pencilled in for this year, and two-year gilt yields are back at levels that make our own hawks look dovish. My mortgage broker mates are already telling clients to lock in now, which says more about sticky services inflation than any MPC minute ever will.