Warsh Says Inflation Risks Have Eased, Bolsters Confidence in 2% Target
Fed Governor Kevin Warsh said inflation risks have eased in recent weeks, strengthening confidence in a return to the 2% target. Short-term Treasury yields fell, while stocks were mixed and gold rose alongside the dollar.
Federal Reserve Governor Kevin Warsh stated that inflation risks have diminished recently, boosting confidence that price pressures will return to the central bank's 2% goal. He described the U.S. economy as resilient, which contributed to a decline in short-term Treasury yields.
Market reactions were mixed ahead of Thursday's U.S. nonfarm payrolls report. Stocks saw choppy trading as weakness in chipmakers offset broader market strength. Oil prices fell, with options markets indicating a return to pre-war trading ranges. Gold climbed alongside the U.S. dollar as investors reassessed the Fed's rate outlook.
ADP data showed U.S. private employers added 98,000 jobs in June. Separately, Bank of England Governor Andrew Bailey adopted a cautious tone on the UK economy without signaling further rate hikes.
Source: First Squawk