Branch2 Intelligence
US Federal Reserve chair Kevin Warsh says he will stick by 2% inflation target, vows to bring in real-time economic data for making interest rate decisions
Key takeaway
Fed Chair Warsh reaffirms 2% inflation target, signals no rate cuts despite political pressure.
- Step 11st-order: Fed Chair Warsh reaffirms 2% inflation target, signaling no rate cuts; US 10Y term premium rises.
- Step 22nd-order: Higher US term premium transmits to UK gilt yields via cointegrated long-rate markets, lifting UK SME borrowing costs.
- Step 33rd-order: UK SMEs face higher financing costs and delayed investment, compressing margins and reducing discretionary demand.
Source: IN:Economic Times
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