Chairman Warsh Offers No Guidance, And Investors Hit The Sell Button

The Fed held rates steady but removed its easing bias, with more officials projecting rate hikes and Treasury yields moving higher. Near-term market uncertainty increased as Chairman Warsh signaled a shift away from forward guidance, while 2-year yields were seen peaking at 4.2%. The message is hawkish and should keep pressure on short-duration rates and bond markets.

Analysis

The Fed held rates steady but removed its easing bias, with more officials projecting rate hikes and Treasury yields moving higher. Near-term market uncertainty increased as Chairman Warsh signaled a shift away from forward guidance, while 2-year yields were seen peaking at 4.2%. The message is hawkish and should keep pressure on short-duration rates and bond markets.