Kim Escue Warns the Bond Market is Playing by Different Rules

Kevin Warsh held rates steady yesterday but Kim Escu says the more important story was the framework shift. The Fed is moving beyond narrow data points toward a broader macro view. She thinks it is one of the most significant changes to monetary policy process in decades and could dramatically improve the Fed's track record on policy mistakes. The bond market is not following the textbook playbook and Kim says it never really does. Long rates staying elevated during a hold or easing cycle is historically normal. The parallel yield curve shift that investors expect is the exception not the rule. On inflation: sticky expectations predate the Iran conflict and the money supply remains historically large. The market will get most wrong in the next 12 to 18 months on how the Fed incorporates its new broader macro lens into actual decisions. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 0:00 Fed holds rates: what actually mattered from yesterday 1:19 Warsh's framework shift: broader macro beyond narrow data 2:35 2 percent target stays but 2.5 could be acceptable 3:49 Strait of Hormuz and sticky inflation expectations 5:02 Why long rates are not following the textbook 7:00 Portfolio construction: active management is paramount 15:28 What the market will get most wrong in the next 12 to 18 months #KevinWarsh #Fed #BondMarket #Inflation #tastylive #TradingTrends #FixedIncome #YieldCurve tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.