USD
Warsh just brought rates back into the driver’s seat.
Friday flipped the script we’d gotten used to all summer. Yields went up and so did the Dollar, 2Y jumped to 4.36%, 10Y to 4.73%, 30Y barely moved to 5.21%. That’s the front end doing the work, a Fed repricing, not a fiscal panic at the long end. DXY closed at 99.71 and September hike odds jumped to about 56%. Warsh leaned on the numbers: 3.7% PCE over 12 months, 4.1% over 6, unemployment at 4.1%, and the market took it as hawkish. For now, “rates up, Dollar down” is dead. Whether it stays dead is another question. ISM and JOLTS Tuesday, ISM Services Thursday, payrolls Friday (+45k expected) will tell us if Friday holds. Overall skew: no chase here. Dollar’s firm short-term, still messy underneath.
