The much-awaited Warsh speech at the Jackson Hole Symposium provided markets with greater clarity, but not many answers. Chair Warsh delivered a hawkish assessment of the economy and offered a clearer indication of the Fed’s reaction function. Warsh stressed that short term interest rates should remain the primary tool for delivering the Fed’s dual mandate […]

US – Treasury support for treasuries Last week, the US Treasury stepped in to support the long end of the curve by announcing an increase in buybacks of longer-dated Treasuries. The move followed a roughly 40 basis point sell-off in 30-year yields over July and August and suggests that long-end yields are becoming an increasingly […]

Fed – Credibility on the line  The July Fed meeting ended up raising market concerns about the new Chair’s commitment to inflation. The decision was to hold rates at 3.50–3.75%, in line with consensus. The commentary, though, underscored a degree of complacency towards the recent pickup in inflation, in contrast to the impression the market […]