Dow

Memory sentiment just hit a new low Sentiment is down 83% over the last month Is this the bottom?

This Warsh contradiction has been nagging at me. At Sintra at the start of the month, he took comfort at the recent decline in bond yields, implying bond markets understood low inflation was on the way. Today, he took comfort at *higher* bond yields, saying they will deliver low inflation. How can this be: that lower bond yields are reasons to feel good about inflation, but higher bond yields are not a reason to feel bad about it? Without him articulating a monetary and economic framework, these statements make it feel like he's winging it.

He's also had it both ways. At Sintra on July 1, the decline in yields over the preceding four weeks was proof that the market took his vow to restore price stability seriously (notwithstanding some key Iran developments over the same period) On July 29, the fact that yields are now higher than they were at the last FOMC is evidence that the no-guidance effort is succeeding (notwithstanding half of the FOMC gave a read on their outlook in the week before the blackout period and the SEP in June was published, albeit without Warsh submitting).