Hawkish Fed pivot: Implications for rates and long-term yields

In this podcast, Edmund Shing, Global Chief Investment Officer, and Guy Ertz, Deputy CIO, discuss the implications of the first FOMC meeting under Kevin Warsh for monetary policy and bond markets.

• A shift towards a more hawkish Fed stance, with policymakers now considering rate hikes instead of cuts, alongside changes in Fed communication such as reduced forward guidance.

• An uncertain rate outlook, where the Fed may remain on hold in the near term but could introduce a rate hike later in the year—potentially in December depending on economic data and political constraints.

• Rising risks for bond markets, particularly at the long end of the curve, as reduced visibility uncertainty on long-term inflation and Fed decisions could increase term premia and push yields higher.

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