Branch² Intelligence
A solid jobs market underpins Warsh’s inflation pledge.
Key takeaway
Strong US jobs data reinforces Fed higher-for-longer rate stance, tightening financial conditions globally.
- Step 1Strong US jobs data reduces odds of Fed rate cuts, pushing US Treasury yields higher.
- Step 2Higher US term premium transmits to UK gilt yields via cointegrated long-rate markets, raising UK SME borrowing costs.
- Step 3Tighter financial conditions and weaker GBP squeeze UK household discretionary spending and raise import costs for SMEs.
Source: NYT Business
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