Summary
- Warsh said long-term Treasury yields and mortgage rates could fall if inflation stabilizes.
- Warsh said elevated mortgage rates reflect inflation that remains above the Fed’s target.
- Markets are watching whether softer-than-expected US June consumer price index (CPI) data could ease pressure on the Fed to raise rates.
Forecast Trend Report by Period
Kevin Warsh stressed the importance of bringing down inflation, saying stable prices could help reduce long-term Treasury yields and mortgage borrowing costs.
Warsh said on July 14 that long-term Treasury yields and mortgage rates could fall if inflation stabilizes, according to the Walter Bloomberg overseas economic news feed.
He also cited price pressures as a key reason mortgage rates remain high. One reason mortgage rates are higher than before, he said, is that inflation is still above the Federal Reserve’s target.
Warsh also expressed confidence in growth driven by productivity gains. “We are not afraid of productivity-led growth,” he said.
Asked how he would respond if President Donald Trump sought to intervene in the Fed, Warsh said, “I will keep doing my job.”
The remarks came shortly after US consumer price index data for June came in below expectations. With inflation showing signs of cooling, markets are watching whether pressure on the Fed to raise interest rates may ease.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.