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Heurist Finance

Kevin Warsh's first Federal Reserve meeting sparks expectations for increased short-term Treasury volatility.

Bloomberg ·
GS
Kevin Warsh's first Federal Reserve meeting sparks expectations for increased short-term Treasury volatility.
  • The first policy decision under Chairman Kevin Warsh is expected to trigger higher volatility at the short end of the Treasury curve, particularly in two-year yields.
  • While short-term rates may see increased swings, analysts suggest the long end of the Treasury curve could see calmer price action.
  • Hawkish signals from the Fed under its new leadership are placing downward pressure on corporate credit spreads, which are currently near historical lows.

Quotes

“two-year Treasury yields may become more volatile as Federal Reserve Chairman Kevin Warsh charts a new course for central bank communications.”— Kay Haigh, Goldman Sachs Asset Management
“Hawkish signals from the Federal Reserve at Kevin Warsh’s first meeting as chair are increasing pressure on corporate credit spreads, which are near historic lows”— Bloomberg

Sources