UBS On-Air: Paul Donovan Daily Audio 'Political pantomime season'

Federal Reserve Vice-Chair Brainard (a respected economist) implied a slowing of policy rate tightening, but that US rates would stay high for some time. Similar language about the persistence of high rates is to be expected - as the Fed’s June policy errors trashed forward guidance, markets discount Fed comments. Fiercer language is required to generate a moderate market reaction. As profit-led inflation falls, potentially rapidly, the Fed’s language will have to adjust.