POLICY PUGILISTS

Troublingly, two powerful US economic/financial officials are having a policy brawl in broad daylight. New Fed Chair Warsh is intentionally reducing public comments/communication to let markets determine interest rates. Conversely, Secretary Bessent is arguing that rising long-bond yields don’t reflect the economy’s underlying fundamentals. Moreover, Bessent brags that because he has $1T, he will continue intervening to support bond prices and lower yields. Bessent knows better and Warsh is hapless.