Kevin Warsh gets what every Fed chair hopes for: A bond market that trust his words

Kevin Warsh, the new Federal Reserve chairman, has given a speech at the Fed's annual conference in Jackson Hole, Wyoming. He stated that inflation is still too high and that the central bank may need to raise interest rates in the coming months to bring it down. According to Fortune, Warsh acknowledged that recent US reports show inflation has cooled slightly, but he emphasized that underlying trends have not meaningfully improved.

Warsh's comments appeared to reassure Wall Street that fighting inflation remains the Fed's priority. As reported by Fortune and Channel News Asia, he pointed to data showing that inflation remains above the central bank's 2% target. MarketWatch noted that the bond market took Warsh's words at face value, with the yield on the two-year Treasury rising from 4.22% to 4.30% after his speech, indicating expectations of a potential rate hike.

The US stock market held steady after Warsh's speech, according to Fortune. Warsh did not imply that a rate hike is imminent, but his comments suggested that the central bank is prepared to take action if inflation does not continue to decline. He replaced Jerome Powell as Fed chair in late May.

Brief written by urgent.news from MarketWatch, Le Monde Economie, Fortune, Channel News Asia, CBC Business — 5 reports on this story. Machine-written — may contain errors; check the original before relying on it.