Warsh’s inflation stance lifts long Treasuries, dims rate-cut bets
What’s new: Jeffrey Gundlach said the Fed chair’s price-stability push makes aggressive easing less likely and boosts the case for long bonds.
Federal Reserve Chair Kevin Warsh struck a more hawkish tone than many investors expected, reinforcing the central bank’s focus on returning inflation to 2% and cooling hopes for near-term rate cuts. DoubleLine Capital CEO Jeffrey Gundlach said Warsh’s emphasis on price stability reduced the risk of overly loose policy that could reignite inflation, making long-term U.S. Treasuries more attractive. Warsh repeated after the Fed’s policy decision that the committee’s commitment to restore price stability was “strong, unanimous, and unambiguous.” He also declined to submit an individual rate forecast in the Fed’s dot plot and signaled a broader review of how the central bank communicates policy.