Federal Reserve Chairman Kevin Warsh declared there is no soft inflation target, only the 2% goal, signaling tighter policy if price pressures persist. Warsh made the remarks on July 29 after the FOMC voted to hold rates, rejecting any tolerance for inflation above target. His first policy statement in June was the shortest in nearly two decades at 130 words, and he has avoided forecasts and forward guidance. Longer-term bond yields are climbing as investors price in lower tolerance for persistent inflation, while stocks have become more sensitive to macro data.
Warsh's hawkish stance signals tighter policy, raising the effective federal funds rate.
Hawkish Fed stance pushes longer-term yields higher.
