Fed lifts the hawkish bar for BoE
SPY•Key events to watch
- The Bank of England interest rate decision
- Final Eurozone CPI figures for August
- U.S. weekly jobless claims
Markets react to higher rate expectations
As Warsh talked, short-term Treasury yields shot up to their highest since mid-2024, lifting the dollar to seven-week highs. Longer-dated bonds actually found relief in the Fed rediscovering its inflation-fighting religion, with the benchmark 10-year yield hovering below the critical 5% level.
That offered relief to stocks in Asia, with most share markets catching a bid. European bourses are set for a 0.5% rise at open, while Nasdaq futures lifted 0.6% and S&P futures added 0.5%.
How long the calm lasts is anyone's guess. The world is adjusting to an era of recurring supply shock, where inflation is running hotter than central banks would like and interest rates higher than investors had counted on.
