Warsh Faces Inflation Test as Iran War Energy Spike Unhinges US Yields
Updated
Updated · Bloomberg · May 15
Warsh Faces Inflation Test as Iran War Energy Spike Unhinges US Yields
8 articles · Updated · Bloomberg · May 15
Kevin Warsh is heading into an early credibility test as incoming Fed chair, with bond investors increasingly pricing in faster US inflation.
Societe Generale’s Subadra Rajappa said Friday that an Iran war-driven energy price spike is feeding those inflation fears and leaving yields looking “unhinged.”
That backdrop could make it harder for Warsh to deliver the lower interest rates he has favored and that President Donald Trump has pressed for.
The market reaction highlights a broader risk for the Fed: geopolitical energy shocks can quickly tighten financial conditions even before policymakers act.
Can new Fed Chair Kevin Warsh deliver his promised rate cuts while inflation continues to soar?
As the Fed plans to shrink its massive balance sheet, what does this mean for global markets?