Warsh's Silence Ahead of Jackson Hole May Spook Markets
Municipal and U.S. Treasury bond yields dropped slightly on Thursday as investors await Federal Reserve Chair Kevin Warsh's keynote address at the Jackson Hole symposium.
Warsh's speech, scheduled for Friday, is expected to be brief and lacking in detail that could sway markets, according to Cooper Howard, director of fixed income strategy at Charles Schwab.
'I think he's going to lean more toward potential changes within the Fed rather than the outlook for policy going forward,' Howard said. 'Since inflation reports haven't shown progress in reducing inflation to 2% target, Warsh may reiterate that it's part of the Fed's mandate to bring down inflation.'
In other news, municipal bond mutual funds saw significant inflows, with investors adding $1.442 billion in the week ended Wednesday, compared to $838.3 million the previous week.
High-yield funds also saw increased activity, with $302.7 million in inflows compared to $208.3 million the week prior.