A WINNING WEEK WITH A HAWKISH TWIST: MARKETS DIGEST WARSH’S MESSAGE
[Chart courtesy of MarketWatch.com]
- Moving the market
Stocks started the day with a spring in their step but lost a little steam as traders digested Fed Chair Kevin Warsh’s Jackson Hole remarks.
The key takeaway? Inflation may be behaving better lately, but the Fed isn’t ready to declare victory just yet.
That recalibrated expectations in a hurry. Odds of a September rate hike jumped, short-term Treasury yields moved higher, and the dollar found its footing. Meanwhile, risk assets got a bit wobbly.
Gold took it on the chin, dropping more than 3%, while Bitcoin delivered its usual roller-coaster performance, briefly topping $81,000 before sliding back toward $77,000.
The broader lesson from today is pretty simple: when real yields and the dollar rise together, even favorite inflation hedges like gold and crypto can have a tough day at the office.
In my view, the long-term case for both is still intact, but today’s action was a reminder that markets rarely move in a straight line. After all, if investing were easy, everyone at the coffee shop would be a billionaire.
So, was today’s pullback just a reality check, or the market’s way of telling us higher rates may be sticking around longer than traders would like?
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