🚨 THE MOST IMPACTFUL SCRIPT FOR THE MARKET THAT IS ABOUT TO UNFOLD.
The Fed just raised rates by 25 basis points, and Warsh’s subsequent message was even more hawkish.
• Inflation is “too high” and has stayed above target for too long.
• The economy has been strengthened and the labor market remains in good shape.
• Price stability is now the Fed’s main focus.
• Rising bond yields are being driven by economic strength, fierce competition for capital, and geopolitics.
• Warsh refuses to rule out the possibility of further rate hikes.
• Traders are now betting on TWO more rate increases before the end of the year.
• And Warsh has clarified the Fed’s stance: “Today’s action is the beginning of showing that we’re serious about this.”
The Fed is raising rates, bond yields are surging, and multiple additional rate hikes are now being priced in.
The message is quite clear: the Fed hasn’t finished tightening yet.