Kevin Warsh’s remarks suggest the Federal Reserve may tighten policy, potentially slowing the S&P 500 and Nasdaq’s 22-28% gains over the past year.
Federal Reserve Chair Kevin Warsh indicated the central bank may raise interest rates, citing elevated prices. His comment, “we’ve seen that prices are too high,” suggests a shift toward hawkish policy, which could dampen equity markets.
The S&P 500 and Nasdaq have surged 22% and 28%, respectively, over the past 12 months, driven by AI-related spending and tech infrastructure investments. Global data center spending reached $1 trillion in 2025, fueling growth.
Higher borrowing costs could pressure companies, particularly in tech, where capital expenditures are critical. CME Group’s FedWatch tool estimates a nearly 90% chance of a rate hike by December 2026.