Tag: option trading

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Fed Chairman Kevin Warsh has been clear: The central bank has gotten too comfortable sharing its expectations for the path of monetary policy, and believes its policy decisions have been hamstrung as a result. Wall Street is now blasting its response: Dialing back communications will be tolerated, a perceived void of information will not be. The boomerang Fed policymaker (Warsh served on the Board of Governors from 2006 to 2011 under his mentor, chairman Ben Bernanke) has been consistent in his criticism of forward guidance—the practice of publicly sharing expectations of where short-term interest rates will go. During a press conference following the meeting of the Federal Open Market Committee (FOMC) last week, Warsh built on his thinking. In reducing forward guidance, he said, market prices can respond to economic data “in the direction and magnitude they see fit.” This ultimately benefits the Fed, he suggested: “The central bank need not always and everywhere be the center of attention … For our part, we need to observe market reaction to developments, direct and unfiltered.” If reaction is welcome, markets delivered: Long-dated bonds spiked after Warsh’s statement and remain elevated, while two-year Treasuries slumped, reflecting expectations that the Fed would not be tightening financial conditions. The response from investors wasn’t necessarily in reaction to what Warsh did or didn’t say, J.P. Morgan’s Alex Wolf told Fortune, it was a reflection of newfound uncertainty. Read more [paywall removed for Redditors]: https://fortune.com/2026/08/04/kevin-warsh-forward-guidance-goldman-sachs-wall-street-framework-inflation/?utm_source=reddit/ submitted by /u/fortune [link] [comments]

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The discomfort stems, in part, from Warsh’s post-FOMC conference remarks, in which he indicated that patience with above-target inflation is wearing thin, while also suggesting that tightening of financial conditions was already underway, courtesy of rising yields on long-dated bonds. “Markets are now questioning the Fed’s willingness to follow through on market pricing of hikes,” Alex Wolf, global head of macro and fixed income strategy at J.P. Morgan Private Bank, tells Fortune. “The perception … of the market doing the work for the Fed in terms of tightening financial conditions leaves a little bit of doubt around on the Fed’s willingness to then follow through on markets pricing hikes.” The market is also being asked to digest meaningful shifts in Fed policy—the crown jewel of U.S. financial institutions—Wolf highlights: “Some doubts [are] creeping in because we have a new Fed chairman, we have many new structures in terms of the committees of the Fed, so you’re dealing with the Fed that the market is still trying to understand.” Read more [paywall removed for Redditors]: https://fortune.com/2026/07/31/the-fed-did-exactly-what-wall-street-was-expecting-so-why-are-markets-so-vexed-by-kevin-warsh/?utm_source=reddit/ submitted by /u/fortune [link] [comments]

Kevin Warsh, in his second press conference as Fed chairman, gave the bond market credit for doing his tightening for him. Within the hour, it went further, and made clear what it thought of his decision not to raise rates. The 30-year treasury yield surged 10 basis points to 5.21%, its highest level in 19 years, while the 10-year—important for the mortgage market—climbed seven basis points, to 4.67%. However, the 2-year actually fell four basis points. The reason why is because traders were backing off the odds of an imminent hike, and simultaneously demanded more compensation to hold longer government debt, believing that inflation would continue to bite. Equities also took the press conference badly. After a brief surge in the initial announcement, the Dow Jones Industrial Average fell 1,153 points, or about 2.1%, its worst day since April 2025. The S&P 500 fell 1.5% and the Nasdaq 1.7%. Warsh had previously spent the hour telling reporters that his system of non-forward guidance was working, partially because markets could do the job for him. “We’ve seen a material tightening, not just in nominal rates, but in real rates too, and we’re observing it,” he said. “Even while at some level we haven’t done much in 42 days, the markets have done quite a bit.” That is by design. Warsh’s signature move as chairman has been to strip out forward guidance so that markets can price the economy as opposed to just parroting the Fed. Read more [paywall removed for Redditors]: https://fortune.com/2026/07/29/kevin-warsh-treasury-yields-stocks-rate-hikes/?utm_source=reddit/ submitted by /u/fortune [link] [comments]

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From sovereign bonds to modern banking, debt is one of humanity’s most elegant and misunderstood creations. submitted by /u/bloomberg [link] [comments]

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Federal Reserve Chair Kevin Warsh said Tuesday that the Fed will make high inflation “a thing of the past,” yet he provided no signal about the central bank’s next steps. Fed policymakers “have no tolerance for persistently elevated inflation,” Warsh said in his first appearance before Congress since becoming chair May 22, replacing former chair Jerome Powell. “And we share a resolute commitment to restoring price stability.” Still, Warsh heads a sharply divided rate-setting committee, with about half of the 19 policymakers penciling in higher interest rates by the end of the year in forecasts released last month. Another half have signaled that they support keeping rates unchanged or even cutting them. Warsh faces a stiff challenge in reconciling the divided committee while navigating a rapidly-changing economic outlook. Warsh spoke to the House Financial Services Committee soon after the government reported that inflation fell 0.4% from May to June, driven down mostly by cheaper gas prices. Core inflation — which excludes the volatile energy and food categories — was unchanged last month, a broader slowdown in price increases than economists expected. Read more [paywall removed for Redditors]: https://fortune.com/2026/07/14/kevin-warsh-fed-inflation-congress-divided-committee/?utm_source=reddit/ submitted by /u/fortune [link] [comments]

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Buried in the Federal Reserve’s June policy statement—the shortest of Kevin Warsh’s young tenure as chair—is a single sentence with no qualifiers, no hedges, and, according to at least one longtime Fed watcher, more signal than anything in the minutes released Wednesday: “The Committee will deliver price stability.” “There’s not a qualifying statement after that,” said Laura Ullrich, a former senior regional economist at the Federal Reserve Bank of Richmond who now directs economic research at the Indeed Hiring Lab. “It doesn’t say the committee will deliver price stability while also blah blah blah blah. It doesn’t have a qualifying statement.” Despite its brevity, she called it “a very short, but very strong statement.” It read as an unhedged commitment that doesn’t usually appear in a document over which every word is fought over by the 19 people who make up the Federal Open Market Committee. The minutes confirmed what Warsh had already previewed at his post-meeting press conference: a “family fight” over where rates go next. The FOMC voted unanimously on June 17 to hold the benchmark rate at 3.5%-3.75% for a fourth straight meeting—the first unanimous vote in some time. A handful of participants saw a case for raising rates immediately but agreed to go along with the hold. The rest of the committee split over where things should stand by December: many said the appropriate rate was at or slightly below the current range, while the minutes noted “many other participants” argued it needed to be higher. The minutes noted only that future action “would depend on incoming information.” Read more [paywall removed for Redditors]: https://fortune.com/2026/07/08/laura-ullrich-fed-reserve-kevin-warsh-minutes-fomc/?utm_source=reddit/ submitted by /u/fortune [link] [comments]

Its name is rarely spoken in public, but the family office of Abu Dhabi's ruler is a global force with a huge appetite for deals. submitted by /u/bloomberg [link] [comments]

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This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome. Replies are expected to be constructive and civil. Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers. submitted by /u/AutoModerator [link] [comments]

And so it begins... submitted by /u/KakaakoKid [link] [comments]