BofA Morning Market Tidbits: Markets are reading Warsh as a real hawk

Key takeaways Markets are still dissecting the combination of a new Fed Chair and falling oil prices cooling down inflation. But the key story the market is pricing is that a hawkish Warsh Fed will deliver tighter real policy rates. Today's events: We expect the ISM Services Index to remain in expansionary territory at 54.0 Between a hawkish Warsh and lower oil prices The market is still dissecting the combination of a new Fed Chair and falling oil prices following the fragile deal between the US and Iran. But what is going on in the market's mind? Inflation breakevens are certainly falling, and lower oil prices are probably helping on that front. However, the key story the market is pricing is that a hawkish Warsh Fed will deliver tighter real policy rates to help bring inflation down. Time will tell. Antonio Gabriel | Global Economist BofAS