With the 10-year Treasury yield already above 5%, oil above $100 and inflation still running above the Fed’s 2% target, financial conditions have tightened even before the decision. The key question is whether Warsh signals that this is the beginning of further tightening or simply a one-off adjustment.
A hawkish message could push yields and the dollar higher, putting renewed pressure on long-duration growth stocks, gold and Bitcoin. A cautious message could trigger relief across risk assets.
For me, the most important number after the meeting is not the Fed Funds rate—it’s the 10-year yield.
If yields stay above 5%, the bond market may be doing more tightening than the Fed itself.
@WallStreet_Tiger [正经]
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