Fed's Warsh on Trump Collision Course as Rate Hike Looms
Speakers
Mark Cranfield
— Cross Asset Strategist, Bloomberg
Summary
Bloomberg MLIV strategist Mark Cranfield previews upcoming central bank decisions from the Fed, BOJ, and BOE. He notes that while Fed and BOJ rate hikes are largely priced in, the Bank of England faces a much tougher environment due to high inflation and an upcoming budget, which is expected to drive significant UK market volatility.
- A 25 bps rate hike by the Federal Reserve is fully priced in by markets.
- Fed guidance on future hikes amid high oil prices will be the key driver of volatility.
- The Bank of Japan's expected rate hike is also priced in, with minimal market reaction anticipated.
- The Bank of England faces a difficult decision due to high inflation and rising energy costs.
- Uncertainty around the October UK budget will likely lead to a steeper UK yield curve.
- High volatility is expected in both long-end gilts and the British pound.
Ideas
BOE uncertainty will steepen UK yield curve.
The Bank of England is in a difficult position due to high inflation and rising energy costs, compounded by uncertainty surrounding the upcoming October UK budget's mix of spending and cutbacks. Regardless of the immediate rate decision, this environment will result in a steeper yield curve, alongside significant volatility in both the long end of the gilt market and the British pound.
Up Next
This Bloomberg Markets video, published September 14, 2026, features Mark Cranfield discussing GBP. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: Mark Cranfield · Tickers: GBP