WS #16013
Federal Reserve official Kevin Warsh's refusal to signal another rate hike has caused October rate-hike odds to plummet to 14%, fundamentally altering the macro backdrop. This dovish pivot has triggered a flight to safety in long-duration bonds, with the iShares 20+ Year Treasury Bond ETF posting its best weekly gain since March 2025 (+2.55%). The market is now pricing in a pause in tightening, which supports growth and tech valuations while dampening the bearish impact of recent inflation data. This shift effectively neutralizes the immediate threat of a liquidity crunch, allowing risk assets to stabilize despite geopolitical noise.
Fed Pivot and Bond Rally
Federal Reserve official Kevin Warsh's refusal to signal another rate hike has caused October rate-hike odds to plummet to 14%, fundamentally altering the macro backdrop. This dovish pivot has triggered a flight to safety in long-duration bonds, with the iShares 20+ Year Treasury Bond ETF posting its best weekly gain since March 2025 (+2.55%). The market is now pricing in a pause in tightening, which supports growth and tech valuations while dampening the bearish impact of recent inflation data. This shift effectively neutralizes the immediate threat of a liquidity crunch, allowing risk assets to stabilize despite geopolitical noise.