'Warsh Had to Win His Credibility:' Rabobank's Foley

Watch on YouTube ↗  |  September 17, 2026 at 13:46  |  6:31  |  Bloomberg Markets
Speakers
Jane Foley — Rabobank Head of FX Strategy

Summary

Jane Foley, Rabobank Head of FX Strategy, joins Guy Johnson to discuss the Fed's rate hike and Chair Warsh's credibility, the dollar outlook, Bank of England policy, sterling, gilts, the BOJ, and the yen. She favors selling sterling on budget and positioning risks, sees near-term yen disappointment risk but medium-term yen upside, and notes a positive equity slant from early Fed tightening.

  • Fed hiked rates and Chair Warsh delivered a hawkish message to establish credibility.
  • Jane Foley says the dollar outlook is data-dependent and not a clean buy despite possible further hikes.
  • She would sell sterling due to priced-in BOE hikes and UK budget/gilt risks.
  • She sees near-term yen disappointment risk if the BOJ fails to signal faster hikes.
  • She remains medium-term optimistic on the yen due to Japanese reforms.
  • She notes a positive equity-market slant from the Fed hiking early to reduce total tightening.
  • Guy Johnson questions how rate-insensitive the US economy is with fixed mortgages and AI investment.
Ideas
Jane Foley Rabobank Head of FX Strategy 2:55
Early Fed hike positive for equities.
Jane Foley sees a positive slant for equities from the Fed hiking relatively early in the cycle, because it may reduce the total number of hikes needed and improve the chance of bringing inflation back down without aggressive tightening.
SPY LOW
Jane Foley Rabobank Head of FX Strategy 5:02
Short sterling; BOE hikes priced, budget risk.
Jane Foley would sell sterling because the market has already priced in about four Bank of England rate hikes, while the October 28 UK budget faces diminished fiscal headroom and roughly 30% foreign ownership of gilts makes that market fickle. A budget disappointment could hurt both gilts and the pound.
UKGILT HIGH
Jane Foley Rabobank Head of FX Strategy 5:02
Short sterling; BOE hikes priced, budget risk.
Jane Foley would sell sterling because the market has already priced in about four Bank of England rate hikes, while the October 28 UK budget faces diminished fiscal headroom and roughly 30% foreign ownership of gilts makes that market fickle. A budget disappointment could hurt both gilts and the pound.
GBP HIGH
Jane Foley Rabobank Head of FX Strategy 6:23
Medium-term yen bullish on Japan reforms.
Jane Foley is optimistic that the yen can hold a better tone over the medium term due to a lot of reforms in Japan, even though the BOJ may disappoint near term if it cannot signal an accelerated pace of rate hikes.
FXY MED
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This Bloomberg Markets video, published September 17, 2026, features Jane Foley discussing SPY, UKGILT, GBP, FXY. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Jane Foley  · Tickers: SPY, UKGILT, GBP, FXY