- Fed Chair Kevin Warsh declined to say whether the Fed will hike again at the Oct. 27-28 meeting, reiterating his opposition to forward guidance.
- Warsh described a synchronous tightening by central banks across most of the world, with each acting under its own mandate.
- The Fed raised rates to 3.75% to 4% last month, its first hike since 2023. CME FedWatch shows a 72.3% chance of an unchanged rate at the October meeting, and the majority of traders expect a 25 basis point hike in December.
- Energy costs tied to the Iran war and the AI investment boom are lifting inflation and borrowing costs globally, as global public debt approaches 100% of GDP.
- S&P 500 and Nasdaq futures edged higher after the speech, while Asian indexes and Treasury yields were largely stable.
Quotes
“I don't prejudge meetings.”
“there's no free riders”
“a synchronous tightening in monetary policy in most places around the world”