Inflation has exceeded the Federal Reserve’s 2% target for 65 consecutive months, an unprecedented streak. The federal funds rate currently stands between 3.50% and 3.75%, a level many market participants view as insufficiently restrictive given persistent price pressures. Three regional Fed presidents dissented during the July 28-29 FOMC meeting, favoring interest rate hikes. Kevin Warsh’s inaugural speech at the annual Jackson Hole symposium on August 28 is highly anticipated, with markets hoping for concrete action rather than mere rhetoric. Rising 30-year Treasury yields are putting increasing pressure on mortgage rates, corporate borrowing costs, and equity valuations.
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