Prediction markets see low probability Fed Chair Warsh will discuss bond market at Jackson Hole
Kalshi prediction market traders assign a 16% chance that Fed Chair Kevin Warsh will mention the bond market and an 8% chance he will refer to a rate cut in his upcoming Jackson Hole speech.
Traders on the Kalshi prediction platform estimate a 16% likelihood that Federal Reserve Chair Kevin Warsh will reference the bond market and only an 8% chance he will mention a rate cut during his keynote at the Jackson Hole symposium in Wyoming. The odds of him using the phrase "yield curve" are also low, at 8%, while the probability of him speaking about inflation is close to 90% and about a task force exceeds 70%.
The market’s low expectations come despite recent Treasury actions to double long-term debt buybacks to $4 billion, a move interpreted as an effort to ease Treasury yields after the 30-year yield rose above 5.3%, its highest level since 2007. Analysts note that Warsh has been more reticent than his predecessor, Jerome Powell, in offering policy guidance.
"Warsh has been much more reluctant to share his policy views or assessment of the current economic situation than Powell was," said David Mericle, chief U.S. economist at Goldman Sachs.
"By further front-loading T-bill issuance, I believe the U.S. Treasury is complicating the Fed's job," said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners.
A CNBC survey found that 45% of respondents do not expect Warsh to expand on the rate outlook, and a smaller market predicts a 67% chance the S&P 500 will move 0.5% after his remarks. The article discloses a commercial relationship between CNBC and Kalshi.