Betting markets now assign a 35 to 40 percent probability of a July rate increase following Fed Chair Kevin Warsh’s first policy meeting.
Federal Reserve Chair Kevin Warsh’s first policy meeting has upended market expectations, with traders now pricing a 35 to 40 percent chance of a July rate hike. This marks a sharp reversal from earlier assumptions that Warsh would deliver accommodative policy aligned with the White House’s preferences.
Prior to the meeting, investors had anticipated rate cuts, driven by Warsh’s nomination and perceived alignment with President Trump’s economic agenda. However, Warsh’s shift toward data-driven decisions with minimal forward guidance has left markets recalibrating their forecasts.
The volatility in prediction markets underscores how investor narratives can shift rapidly when central bank signals diverge from expectations. The focus now turns to upcoming economic data to clarify the Fed’s next move.