Henry Song, fixed-income portfolio manager at Diamond Hill, said market-priced
Fed rate hikes look intended more to reinforce the Fed’s independence from
political pressure than to materially curb inflation. He said he is watching for
signs whether the move is a one-off or the start of a tightening cycle and
whether Chair Walsh will confront the president early in his term. Song added
that holding rates could be justified by macro data but might be read as
political capitulation — a perception that would push up long-term yields.
