Treasuries Gain as Confidence in Warsh Grows, Trump Threatens EU Tariffs

Summary

Bloomberg Brief covered the market reaction to a hawkish Fed rate hike under Chair Kevin Warsh, with Treasuries gaining, the dollar firming, and equity futures higher. Guests discussed central bank paths for the UK, Japan, and Europe, Trump's tariff threat against the EU over Canada ties, and oil market risks from Saudi pipeline damage and Russian refinery attacks. Jane Foley of Rabobank explained her short-sterling view and medium-term constructive yen stance, while James Herron highlighted gasoline as the next refined-product pressure point.

• Fed hiked rates 25bp and Chair Warsh stressed inflation is too high; markets took the hawkish message relatively well.
• Treasuries gained, the dollar firmed after the Fed, and global equities were mixed with US futures higher.
• Jane Foley of Rabobank said she would sell sterling and was constructive on the yen over the medium term.
• Bank of England and Bank of Japan policy decisions were previewed, with UK inflation and BOJ tightening pace in focus.
• Trump threatened EU tariffs over Canada ties; analysts warned the dispute could threaten the EU-US trade relationship.
• Oil fell as Saudi pipeline recovery progressed; gasoline was flagged as the next tight refined product as refineries maximize diesel.
• AI leaders met King Charles in Scotland; OpenAI funding and model misbehavior were in the news.