Dollar Loses From Hit to Fed Credibility: 3-Minutes MLIV

• The Fed press conference was deemed a 'disaster' due to perceived lack of authority and inconsistent communication from Chair Warsh.
• Warsh's statements undermined the Fed's inflation target and measurement methods, suggesting a 'crisis policy mode.'
• The poor communication is expected to lead to a weaker dollar and higher long-end bond yields, resulting in a steeper yield curve.

Mark Cudmore criticizes the recent Fed press conference as a 'disaster,' arguing that Chair Warsh undermined the Fed's credibility by appearing uncertain and inconsistent. This lack of clear communication is expected to be 'bad for the dollar' and 'bad for long-end bonds,' leading to continued steepness in the yield curve.