This is not a surprise. It's less than a week before the mid-term elections, and anything beyond holding rates steady would be perceived as meddling in electoral politics.
On the other hand, to quote Rusk, "If you choose not to decide You still have made a choice."
U.S. Treasury yields went in different directions Wednesday as markets reacted to the Federal Reserve’s widely expected decision to hold rates unchanged and to Chairman Kevin Warsh’s press conference.
The 10-year yield increased to 5.036% from 5.020% before the rate decision was announced. The two-year, however, fell to 4.702% from 4.770%, according to Tradeweb.
The disparity came as Warsh avoided forward guidance, while stating that fighting inflation shouldn’t mean stopping economic growth. He said productivity has been moving higher. “And so economic growth is higher. But that doesn’t tell me that economic growth is somehow causing inflation, making our job harder,” he added.
The dollar, in turn, changed direction and weakened during Warsh’s remarks. The WSJ Dollar Index, was down 0.1% following the press conference, after rising slightly before.
Following the monetary policy decision, odds of an interest rate increase in December reached 83%, up from 78% yesterday, according to CME. Gross domestic product data and the Fed’s preferred inflation gauge, the PCE, are due Thursday and could change the outlook for interest rates.
I'm not gonna make predictions, because I foresee that any such prediction would be wrong.









