The market is digesting more restrictive U.S. monetary policy, says Stephen Coltman, head of macro at 21shares, in a note. Markets have gone from pricing rate cuts at the start of the year to now expecting rate increases over the coming months, he says. Chairman Kevin Warsh's first FOMC meeting was hawkish relative to expectations while at the same time inflation expectations have been collapsing as oil prices return to prewar levels, Coltman says. "The combination of these two factors has led to a surge in real yields at the front end of the U.S. rates curve and effectively an aggressive tightening of U.S. monetary policy," he says. (emese.bartha@wsj.com)
Dow Jones Newswires
Markets Seen Absorbing Restrictive U.S. Monetary Policy — Market Talk
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The market is digesting more restrictive U.S. monetary policy, says Stephen Coltman, head of macro at 21shares, in a note. Markets have gone from pricing rate cuts at the start of the year to now expecting rate increases over the coming months, he says. Chairman Kevin Warsh's first FOMC meeting was…