Bloomberg Surveillance · Monday, July 6, 2026
The new Federal Reserve chair's approach of providing less guidance is expected to lead to increased market volatility as the market attempts to interpret monetary policy independently. This adjustment period, characterized by a wider dispersion of estimates, is seen as a reason for recent market choppiness. However, over time, this could lead to lower volatility in the bond market, particularly at the long end.
“And this is I think what we got to get used to is that with the new chair probably not giving as much guidance, is going to allow the market to kind of figure it out on its own and have these different different views.”
“We're in that adjustment period now, and I think that's one of the reasons why the market's been a little choppy or even correcting in the last month or so, is we're getting used to this new regime, which is going to be higher volatility and potentially the bond market.”
“But over time, I think what's going to end up happening is the market's going to sell down. It's going to it's actually more estimates. A wider dispersion of estimates actually least to lower volatility in the pricing over time.”