Did Fed Chair Kevin Warsh Just Send the Stock Market a 6-Word Warning?
There's no ambiguity that the Fed has put inflation control as its top priority.
Did Fed Chair Kevin Warsh Just Send the Stock Market a 6-Word Warning?
Overview
Just six words from new Fed Chair Kevin Warsh ended a lot of hopes for rate cuts at any point in the near future: "The Committee will deliver price stability." That's the final sentence in the Fed's brief post-meeting statement.
The decisive way in which it was delivered was also interesting. Warsh didn't say the Fed was "committed" to price stability. He didn't say the Fed was "working toward" price stability. Instead, he said the Fed "will deliver" price stability.
Details
That phrasing was no doubt deliberate, and the financial markets took it that way. Stocks moved sharply lower. The 2-year Treasury yield, which is often considered a loose proxy for Fed expectations, moved sharply higher.
Source
Originally published at www.fool.com.
