Shafaqna English– A pronounced move toward a steeper yield curve in the U.S. Treasury market, which followed the Federal Reserve’s decision earlier this week to hold interest rates steady, has sparked growing unease regarding the central bank’s policy credibility and its resolve to take decisive action against persistent inflationary pressures.
Analysts suggest that the divergence between falling short-term yields and rising long-term yields reflects a growing belief among market participants that the Fed’s rate hiking campaign has likely reached its endpoint; this perception persists despite Chair Warsh’s aggressive rhetoric on Wednesday, in which he vowed that monetary policymakers “will not hesitate to act” if inflation proves more intractable than currently anticipated.