Bank of America Warns: If the Federal Reserve's Kevin Warsh Does Not Signal Rate Hikes at Jackson Hole, 30-Year Treasury Yields Could Surge to 5.5%
Bank of America released a research report on August 24, pointing out that market expectations for the Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole annual meeting have shifted. If Kevin Warsh fails to clearly articulate the inflation outlook and the monetary policy reaction function, the 30-year U.S. Treasury yield could quickly test 5.5% or higher, and the U.S. dollar would also face a new round of downward pressure. Barclays economists similarly believe that there is more than a 50% probability that Kevin Warsh will explicitly state that the Federal Reserve is willing to resume interest rate hikes if inflation does not improve. Kevin Warsh's speech is scheduled for 10:00 AM EDT on August 28.
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