Indian bonds fall for fifth week on Fed hike, RBI moves
Indian bonds fall for fifth week on Fed hike, RBI moves. The Fed approved a quarter-point rate hike this week, and markets are now pricing in several more ahead.
What happened
China News Service | China News Service | Getty ImagesWith a few carefully chosen words, Federal Reserve Chairman Kevin Warsh both explained this week's decision to hike interest rates and raised vexing questions about what comes next. Even when rates are higher, stocks should still beat bonds "This was not a mistake; it was a phrase he repeated several times and looked very much a deliberate choice to frame policy in this way," Guha added, noting that "the framing is substantively different to that used by the Fed in recent years, and raises the possibility of a more open-ended approach to the number of hikes that might be required.
Warsh's framing of the hike as removing "a dose" of accommodation could be seen as the first of multiple steps toward withdrawing support the Fed no longer feels is necessary. Eric Rosengren: Appropriate to have another 25 bps hike in 2026Squawk BoxAsked by CNBC's Steve Liesman to explain how far he sees the current rate — in a target range of 3. One of the initial reactions was pricing in higher odds for another hike when the Fed next meets in October.
Markets are pricing in the likelihood that the Warsh Fed removes a few more "doses" before it is finished.
The wider picture
635% near the end of 2027, which would argue for three or four more hikes ahead. "Rather, we see this as a removal of the insurance cuts the Fed delivered in the fall of 2025. Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsFed Chairman Kevin Warsh said the central bank removed "a dose of accommodation" from the economy, a phrase that set off a round of speculation about what that means for interest rates. At the post-meeting news conference, Warsh rejected conventional thinking about how officials view the guardrails for setting monetary policy.
US Federal Reserve Chair Kevin Warsh speaks during a news conference at Federal Reserve Headquarters on September 16, 2026 in Washington, DC. Kevin Warsh discussed the central bank's decision to raise interest rates for the first time since 2023 at a press conference following its latest policy meeting. Warsh described Wednesday's decision to lift the central bank's benchmark rate by a quarter percentage point not specifically as a tightening of policy but rather as removing "a dose of accommodation.
" Further, he explained that the move was possible because of a U.
What has been reported
S. economy that appears to have "strengthened" and financial conditions that have become less restrictive. While the language may sound like central bank semantics, it gets to the heart of what markets are debating now: How far will the Warsh Fed go if it has only removed a "dose" of help, and what are the guidelines it will be using to formulate policy? The phrase was "the one stand-out hawkish element" of Warsh's post-meeting commentary to the press, Krishna Guha, head of economics and central bank strategy at Evercore ISI, said in a client note.
"That framework has included a calibration of where policy should sit relative to the so-called neutral rate, one that neither boosts nor holds back growth. By extension, benchmark rates that sit well above the neutral rate are considered restrictive, while those closer to or below neutral are regarded as accommodative. The Fed is looking to return inflation to 2%, and policymakers generally consider raising rates as a way to tamp down demand and control price pressures.
"Warsh's framing, if taken literally, raises the possibility that rates might have to keep going up until financial conditions facing the private sector are no longer 'accommodative' – however that is defined," Guha said. "Warsh had the chance to clarify what benchmark he was using to determine how much accommodation remains in policy. watch nowVIDEO5:2605:26Former Boston Fed Pres.
What happens next
75%-4% — sitting above neutral, Warsh essentially rejected the framing, in a statement that runs counter to how central bank policy has operated for more than a decade. Warsh said measuring the benchmark rate relative to neutral is "useful academically. It's a discussion to help us think about policy. Do I think it has any operational effect of decisions that we make today? "The answer helped add a layer of mystery to a Fed chairman already developing a reputation for being cryptic when it comes to how he views the wheels of policy needing to be tuned.
Markets wonder what's nextA round of post-meeting speculation on Wall Street about what's to come has ensued. Goldman Sachs added an October increase to its forecast, as does Bank of America, which also expects another move in December.
The report has been compiled by The Daily Waves using information reported across marketwatch.com, cnbc.com. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.