Warsh's Strong Economy Message: No Near-Term Rate Cuts in Sight

Federal Reserve Chair Kevin Warsh said the US economy appears to have strengthened. He cited healthy consumer spending and a stable labor market, which weakens the immediate case for Fed rate cuts.

The PCE inflation at 3.7% keeps the possibility of a September Fed rate hike on the table. Higher Treasury yields pressure stocks and Bitcoin while borrowing costs stay elevated.

Warsh said real consumer spending had risen by more than 2% over four quarters, with a 4.1% jobless rate and business investment remaining strong. This assessment suggests that the economy needs less help from lower borrowing costs, making near-term Fed rate cuts less likely.