Good afternoon and welcome to Markets Desk.
The biggest story today is the new Fed under Kevin Warsh, and markets felt it immediately. Warsh struck a hawkish tone at his first press conference, with the FOMC projecting higher rates later this year. Treasuries sold off, the dollar index jumped nearly half a percent, and equities took a hit as traders repriced the rate path in real time.
The bond market reaction tells the fuller story. US government bonds dropped sharply after the Fed signaled it intends to tame an inflation jolt tied in part to the Iran conflict. Warsh also moved quickly to restructure the central bank itself, forming internal task forces that analysts say reveal how he plans to fundamentally rewire Fed operations going forward.
Stepping away from rates, Jeff Bezos made headlines in Paris at VivaTech, pushing back hard against the dominant AI-kills-jobs narrative. Bezos argued artificial intelligence will create a labor shortage, not mass unemployment, unlocking what he called endless demand for builders and entrepreneurs. He also pointed to AI accelerating space exploration and the migration of heavy industry off-planet.
That's the tape. Markets Desk, signing off the floor.
