Fed Chair Kevin Warsh Testified Before Congress on July 14 and Said Inflation Remains Too High. A Key Inflation Report Came Out the Same Day. Markets Dropped the Odds of a July Rate Hike to 16%, Down From 42% the Day Before. The Odds Have Since Jumped.
Futures markets paid more attention to inflation data than to Warsh's comments.
Overview
Last week, markets received very mixed signals about the likelihood of a Federal Reserve interest rate hike in July. Fed Chair Kevin Warsh made his debut appearance before Congress on July 14, presenting his semiannual monetary policy report. He painted a picture of inflation that is too high and the Fed's determination to bring it down through monetary policy.
In his prepared remarks, Warsh told members of the House Financial Services Committee that "high inflation has been an undue burden on American households and businesses" and that, if the Fed gets its policymaking right, "the inflation surge of the last five years will be a thing of the past." Warsh added that "the members of our Committee have no tolerance for persistently elevated inflation. And we share a resolute commitment to restoring price stability."
Details
Those remarks by the new Fed chief would suggest that Fed rate hikes, which are generally the central bank's primary tool to tackle high inflation, are imminent.
Source
Originally published at www.fool.com.