Analyst: Jackson Hole Speech by Warsh May Clarify Fed's Inflation Path

On August 25, Gabriele Foa, global credit portfolio manager at Algebris, said the Fed Chair Warsh is expected to provide important updates on how the Fed will address inflation in his Friday Jackson Hole speech, especially after mixed signals were released at the July press conference.

He said, "So far, the Fed has avoided providing clear forward guidance, resulting in an unusually large uncertainty in its policy reaction function." This uncertainty is driving a steeper yield curve for U.S. Treasuries, with long-end yields becoming the main channel for releasing pressure. "This is somewhat at odds with the goal Bessent is trying to achieve by lowering long-term yields, and may also suggest that coordination between the Fed and the Treasury is less than some market participants had previously expected." (Jin Shi)

[TechFlow]