Warsh: Solid Economy, Labor Market Keep Treasury Yields Moving Despite Fed Inaction
Former Fed official Kevin Warsh says robust economic output and a steady labor market are driving moves in nominal and real Treasury yields, even though the Fed has made no major policy changes in 42 days.
Kevin Warsh, a former Federal Reserve governor, noted that economic output and the labor market remain solid and steady. He stated that the Treasury market is reflecting this strength, with both nominal and real yields continuing to move.
According to Warsh, this yield movement occurs despite the Fed having taken little action over the past 42 days. The assessment highlights how market forces—rather than central bank policy shifts—are currently influencing longer-term interest rates.
The comments come as bond markets have repriced in recent weeks, responding to persistent economic resilience. Warsh's remarks suggest that the underlying health of the economy is a key driver for yields, even when the Fed pauses its policy adjustments.
Source: First Squawk