Bloomberg Surveillance · Monday, August 3, 2026
Gary explains that Kevin Warrsh is signaling he is an inflation fighter and that the market is currently doing the Fed's work by steepening the yield curve. He notes that the Fed has limited tools, primarily raising rates or selling the balance sheet, and that the market's actions are making borrowing more expensive, which aids in curbing inflation.
“Chairman Worrish is going out of his way. I mean he's literally going out of his way to tell you he is an inflation fighter, that the stable price mandate and the two percent inflation guide is his bell weather, and he's going there.”
“He has limited tools to get there, as we know. In fact, he has said in the speech, I have two tools to help us get there. I can raise rates or I can sell down the balance sheet.”
“What Kevin is saying, look, the market is doing my job. They're making the ability to borrow money out on the curve more and more expensive, and it's going to continue to get more expensive.”