How Chair Warsh Will Tighten Without Raising Interest Rates

Markets now price a 99.4% probability of no Fed rate cut at the upcoming FOMC meeting, as strong employment and rising inflation complicate easing expectations under new Chair Kevin Warsh. President Trump's push for lower rates is being outweighed by data and rate-market signaling, with the 2-year Treasury implying potential hikes rather than cuts. The setup is broadly hawkish for bonds and rate-sensitive assets.

Analysis

Markets now price a 99.4% probability of no Fed rate cut at the upcoming FOMC meeting, as strong employment and rising inflation complicate easing expectations under new Chair Kevin Warsh. President Trump's push for lower rates is being outweighed by data and rate-market signaling, with the 2-year Treasury implying potential hikes rather than cuts. The setup is broadly hawkish for bonds and rate-sensitive assets.