Will Warsh play it cool and let Bessent take the wheel for now?
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 1.1140 |
ABN AMRO | Bullish | 1.1500 |
Bank of America | Bullish | 1.1500 |
All 28 desk targets for EUR/USD
From the original
After intervention from the US Treasury to cap bond yields, the ball is now over to the Fed's court. It is not your typical approach in handling things as Bessent has essentially now blurred the lines on debt management and monetary policy i.e. interest rate control. In essence,
Related speeches
4 itemsUBS On-Air: Paul Donovan Daily Audio 'Murky situations'
The desk interprets recent comments from US Treasury Secretary Bessent, who expressed confidence in Federal Reserve Chair Warsh's ability to manage inflation, potentially signaling a more hawkish stance from the Fed. This endorsement is particularly notable given Warsh's previous denial of being a "sock puppet" for President Trump, which raises questions about the independence of the Fed amidst current economic pressures (Per the full note [source]). While inflation is expected to decrease as tariff effects fade, the desk remains cautious about long-term price stability. The current USD strength against the EUR and JPY, along with upcoming ECB communications, may create volatility in these currency pairs.
As the markets digest the comments, the markets are doing more tightening
More like this
5 itemsECB president Lagarde talks of 'unwarranted' market moves, but who gets to decide what is warranted?
PBOC sets USD/ CNY reference rate for today at 6.7330 (vs. estimate at 6.6973)
PBOC is expected to set the USD/CNY reference rate at 6.7973 – Reuters estimate
Fed's Musalem says more monetary policy firming will be required