Trump Calls Warsh Amid Macro Crosscurrents, Bond Market Sensitivities

President Trump has been calling Federal Reserve Chair Kevin Warsh since he took office in May to discuss various matters, including AI and Iran, but avoiding interest rates. According to The Wall Street Journal, the president 'repeatedly' calls Warsh, often in bursts of several times over a few days followed by quiet periods.

The bond market may become more sensitive to any hint of political pressure on the central bank, given Trump's history of urging his predecessor to cut rates. Analysts criticized Fed Chair Kevin Warsh's debut press conference for lacking clarity on future rate paths, leaving investors unsettled.

Next week's July report on consumer inflation will provide a key update on whether the rise in pricing pressure due to the Iran war is temporary. A new deal being negotiated to reopen the critical Strait of Hormuz waterway could help keep Treasury yields stable/lower and ease pressure on headline inflation in the months ahead.