AWARDS
Goldman Sachs on the Fed
Fed: Warsh's comments were interpreted as dovish. The dot plot was dovish. As GIR reported: "The June FOMC meeting delivered a dovish surprise, with nine participants forecasting a rate hike in 2026 (versus our forecast of three) and the median projection for fourth-quarter 2027 core PCE inflation at 2.5% (versus our forecast of 2.3%). Market pricing for the end-2026 federal funds rate increased by 20 basis points in response to Chairman Kevin Warsh's projections and press conference." Warsh's apparent reluctance to provide forward guidance led to a significant flattening of the curve. My suspicion is that some of the price action will correct in the coming weeks, but it was undeniably restrictive compared to what were already quite restrictive expectations. As for stocks, I was impressed by how well it was absorbed.
