Goldman Sachs believes that Powell's stance will exacerbate short-term US bond volatility and make the long-end curve flatter.

Kay Haigh of Goldman Sachs Asset Management stated that Kevin Warsh's first speech after the policy decision announced by the Federal Reserve Chairman is likely to cause greater volatility in the short end of the US Treasury yield curve, while tempering price fluctuations in the long end. Haigh, who serves as the global head of fixed income and liquidity solutions and chief investment officer at the asset management division of Goldman Sachs Group, said that Warsh's "unequivocally hawkish" stance surprised the market, as he clearly prioritizes fighting inflation in the short term. Traders quickly increased their bets, believing that policymakers will raise interest rates sooner than previously expected. Data shows that investors currently believe that the probability of a rate hike at the Federal Open Market Committee meeting in September exceeds 80%, with expectations of at least one hike by the October meeting. On Tuesday, traders believed that a rate hike might not occur until December.