Warsh's Hawkish Tone Ignored by Markets

The Federal Reserve's new chair, Kevin Warsh, has been perceived as dovish after his second press conference. Financial markets interpreted his comments as a sign that interest rates will not be hiked in the near term.

Warsh did not lead the Federal Open Market Committee (FOMC) to hike interest rates, which was not a surprise given the low expectations of analysts and financial market participants. He pointed to the rise in market bond yields since the June press conference as a reason for not hiking rates.

However, Warsh's argument that 'the reduction in forward guidance may have been a factor' in pushing up yields was seen as weak by some analysts. They interpreted his comments as an oblique way of taking credit for the rise in market yields.