The Federal Reserve held its target rate at 3.5%-3.75% on Wednesday, with three of twelve FOMC members dissenting in favor of a hike. Chair Kevin Warsh promised repeatedly to "deliver" on inflation without offering a timeline, and the S&P 500 fell as Treasury yields jumped.
Federal Reserve policymakers voted 9-3 to keep the federal funds target rate unchanged at 3.5% to 3.75% on Wednesday, and Fed Chair Kevin Warsh spent his press conference promising action without naming a date for it.
"Deliver it, already"
Reuters reporter Ann Saphir asked Warsh why the Fed has taken no action on inflation despite saying it has no tolerance for it. Warsh responded that he understood the impatience, then summed it up himself.
According to The Motley Fool, Warsh summed it up: "Deliver it, already!", before adding that the Fed was not, in fact, about to do that. He argued the problem predated his eight-and-a-half-week tenure and that candid discussion, not just decisions, is part of the job.
Inflation still above target
U.S. inflation has stayed above the Fed's 2% target since March 2021, and it ran at 3.6% in June. A recent Quinnipiac poll found 88% of Americans call inflation a serious problem. Yet Warsh gave no time frame, course of action, or trigger point for a rate hike or cut.
Markets react
The S&P 500 initially rose, then tumbled 1.5% after bond yields jumped on inflation concerns.
Long-dated Treasurys took the bigger hit: 30-year yields climbed to levels not seen since 2007 as the Fed moved away from forward guidance. With three FOMC members already voting for a hike, a September move looks more likely, though Warsh gave no indication of timing.
Sources: The Motley Fool, Crypto Briefing
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