Warsh Boosts Inflation Confidence; Markets Eye NFP
Fed Governor Kevin Warsh said inflation risks have eased, bolstering confidence in the 2% target. Short-term Treasury yields fell, stocks were mixed, and gold rose with the dollar as traders wait for Thursday's nonfarm payrolls report.
Federal Reserve Governor Kevin Warsh stated that inflation risks have diminished in recent weeks, strengthening confidence that price pressures will return to the central bank's 2% goal. This dovish remark drove short-term Treasury yields lower as Warsh characterized the U.S. economy as resilient.
Markets trimmed bond gains ahead of Thursday's U.S. nonfarm payrolls report, while stocks traded in mixed fashion – weakness in chipmakers offset broader market strength. Oil prices declined, with options markets signalling a return to pre-war trading ranges. Gold rose 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 struck a cautious tone on the UK economy without signaling further rate hikes.
Source: First Squawk