Bank of America
May 18, 2026
Morning Market Tidbits: Surging Yields Leave Warsh In A Tough Spot
Daily UpdateRates Govt BondsMacro Economic IndicatorsOther
New Fed Chair Kevin Warsh faces a challenging market environment as surging Treasury yields, driven by an oil shock and inflation, threaten his plan to cut rates while shrinking the balance sheet.
Key Takeaways
- 1.Treasury yields have climbed significantly across the curve since Kevin Warsh's nomination for Fed Chair on Jan 30.
- 2.Rising yields complicate Warsh's goals of shrinking the Fed balance sheet while simultaneously cutting interest rates.
- 3.The immediate market focus is on the NAHB housing market index release.
Table of Contents
- Key takeaways
- What Matters Today
- A rough start
- US GDP tracking
- Today's economic calendar
- Disclosures
- Research Analysts
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Authors
Aditya BhaveStephen JuneauShruti MishraMatthew Yep
Securities
US 2-Year TreasuryUS 10-Year TreasuryNAHB Housing Market Index
Themes
Monetary Policy TransitionGeopolitical Impact on MarketsQuantitative Tightening vs Rate Cuts
Regions
North AmericaUnited States