Question 1

Сценарий A: Эскалация?

Accepted Answer

Warsh's commitment to lowering inflation leads to increased market confidence in the Fed's ability to control inflation, potentially triggering a sell-off in long-term Treasury bonds. This could result in a sharp rise in short-term yields and a decline in long-term bond prices. Confirmation indicators: A significant increase in the US Treasury yield curve inversion (i.e., longer-term yields falling below shorter-term yields) within two wee (49% model probability, not a guarantee)

Question 2

Сценарий B: Статус-кво?

Accepted Answer

Warsh's commitment to lowering inflation leads to increased market confidence in the Fed's ability to control inflation, potentially triggering a sell-off in long-term Treasury bonds. This could result in a sharp rise in short-term yields and a decline in long-term bond prices. Confirmation indicators: A significant increase in the US Treasury yield curve inversion (i.e., longer-term yields falling below shorter-term yields) within two wee (37% model probability, not a guarantee)

Question 3

Сценарий C: Деэскалация?

Accepted Answer

Warsh's commitment to lowering inflation leads to increased market confidence in the Fed's ability to control inflation, potentially triggering a sell-off in long-term Treasury bonds. This could result in a sharp rise in short-term yields and a decline in long-term bond prices. Confirmation indicators: A significant increase in the US Treasury yield curve inversion (i.e., longer-term yields falling below shorter-term yields) within two wee (14% model probability, not a guarantee)