Fed's Warsh just said the quiet part out loud: the Fed needs *clear market signals, as unfiltered as possible*. Translation? They're still waiting for the data to scream at them before they move.
Right now, that means there's not enough evidence to justify a hike. The Fed's in watch-and-wait mode — they want the market to tell them what to do, not the other way around.
For $SPY, this is a short-term relief read. No immediate rate pressure means risk assets can breathe a bit longer. But the flip side: if inflation or employment data suddenly shifts hard, the Fed's already told you they'll react fast. They're not committed to holding steady — they're just not convinced yet.
Keep an eye on the next CPI and payrolls prints. Those are the "unfiltered signals" Warsh is talking about. Until then, the path of least resistance for equities is sideways to slightly higher, but with vol hanging around because the Fed's posture is reactive, not proactive.
Right now, that means there's not enough evidence to justify a hike. The Fed's in watch-and-wait mode — they want the market to tell them what to do, not the other way around.
For $SPY, this is a short-term relief read. No immediate rate pressure means risk assets can breathe a bit longer. But the flip side: if inflation or employment data suddenly shifts hard, the Fed's already told you they'll react fast. They're not committed to holding steady — they're just not convinced yet.
Keep an eye on the next CPI and payrolls prints. Those are the "unfiltered signals" Warsh is talking about. Until then, the path of least resistance for equities is sideways to slightly higher, but with vol hanging around because the Fed's posture is reactive, not proactive.