Traders bet on October interest-rate hold after Kevin Warsh is tight-lipped at conference

Federal Reserve Chair Kevin Warsh stayed mum Friday on the path for interest rates, even after hot inflation data this week – which traders took as a sign officials will hold rates steady this month.Speaking at an economic conference in Bangkok, an event viewed as his last chance to prepare investors for a possible rate hike, Warsh instead declined to share forward guidance, saying, “It’s a new chapter at the Fed, and we’re not in that business anymore.”Many interpreted his comments – or lack thereof – as a sign that he’s expecting to delay a second rate hike to December.The odds of a hold at the Fed’s Oct.

28 meeting jumped above 85% Friday, up from about 72% the day before, according to CME FedWatch. “I don’t prejudge meetings.I don’t believe in saying now what I might do at the meetings that we have in the balance of this year,” added Warsh, who has repeatedly railed against forward guidance and argued markets should interpret economic data on their own. However, the Fed chief also acknowledged “synchronous tightening in monetary policy” by central banks around the world, which means “there’s no free riders” – something he described as a “positive development.” The Dow Jones Industrial Average rose 122 points, or 0.2%, by about 11:45 a.m.

ET, while the S&P 500 and Nasdaq tumbled 0.3% and 1.1%, respectively.Long-term US Treasury yields showed little movement after Warsh’s comments, remaining stubbornly above 5%.In the days leading up to Warsh’s fireside chat, several of his colleagues at the Fed said they would be comfortable waiting to raise interest rates. Michelle Bowman, the Fed’s vice chair of supervision, said Wednesday at the Bangkok summit that inflation remains above the central bank’s 2% goal – but there’s “time to wait and see” before taking “more action.”But inflation data this week came in much hotter than anticipated, which many investors feared could push the Fed to act quicker...