New Fed Chair Warsh moved markets meaningfully – we discuss how to think about US monetary policy from here. Kevin Warsh&#x27;s first FOMC meeting as Chair caused a big reaction in markets; we outline what to expect from US monetary policy from here. In Europe, we look at the increasing divergence in our ECB and Bank of England rate calls. In Asia, we discuss Bank Indonesia&#x27;s recent hikes and the upcoming Bank of Thailand decision. Chapters: Rates Special: 01:53, US: 08:18, EMEA: 20:29, Asia: 24:18.

The Week Ahead - Meet the New Boss

Nomura – The Week Ahead

# Full Transcript

**Podcast:** Nomura – The Week Ahead

## Transcript

I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability. Hello and welcome to The Week Ahead on Nomura Podcast. My name is Dominic Bunning, Head of G10FX Strategy at Nomura here in London, and today is Friday the 19th of June.

Well, what a week it's been in financial markets. The signing of the U.S. Iran Memorandum of Understanding on Wednesday was clearly overshadowed by the first FOMC policy meeting held under new Fed Chair Kevin Walsh, who you heard from at the top of the show. The meeting, the information released around it and Walsh's press conference all caused a big hawkish reaction in markets, with yields bouncing on that hawkish message and on the lack of forward guidance and the dollar jumping to multi-month highs.

The most obvious takeaway from all of this was that the Fed is going to be changing how it does things, with less forward guidance and with task forces set up to look at a range of topics that are at the heart of the Fed's business. We'll discuss these changes with special guest John Cohn, our U.S. rate strategist, and with David Seif, our Chief Economist for Developed Markets. Central banks have also been pretty exciting in Europe, with George Buckley joining us to discuss our two big changes in view for the ECB, where we've turned more hawkish, and the Bank of England, where we've turned less.

Finally, Yubin Paratuelas will be on to talk all things Asia, but most notably, look at the upcoming Bank of Thailand decision and to review recent events in Indonesia, including two back-to-back rate hikes. So that's plenty to get stuck into this week. Let's get on with it.

At any institution, a change in leadership is a natural and timely opportunity to reaffirm its mission, to review current practices, and to consider whether those practices best meet our objectives. My Fed colleagues and I will be working in close collaboration to ask what changes might improve the conduct of monetary policy.

Well, we're going to kick off this week in the U.S., where we start with a very special guest speaker, John Cohn. John is our U.S. rate strategist based out of New York, and I must make it clear here that he is not a member of the research team, but rather one of our desk strategists. So with that crucial bit of compliance out of the way, John, let's get stuck in. Thanks a lot for joining us. Let's start pretty broad. What did you make of the market reaction for this meeting? There seemed to be some pretty big reactions in rates and in FX markets, actually.

It was almost like the market was caught off guard a little bit. Yeah, thanks, Dom. Good to be back. And you're spot on. The Treasury curve saw a massive flattening on a more hawkish meeting result. You know, we saw the removal of forward guidance. We saw a dot plot with officials split on hikes by year end. We saw higher core PCE inflation projec...

The Week Ahead - Meet the New Boss

Transcript

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Every day you wait, your competitors are finding
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The Week Ahead - Meet the New Boss

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.