
FOMC Meeting Preview: Three Questions for Chairman Warsh
Assuming the Fed delivers the expected hike, traders will want to know WHAT could prompt another hike, WHY they hiked this time, and HOW to interpret the dot plot.
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Assuming the Fed delivers the expected hike, traders will want to know WHAT could prompt another hike, WHY they hiked this time, and HOW to interpret the dot plot.

The bear steepening in the Treasury markets, decision outsourcing to the bond market, three hawkish dissents, dollar weakness, and simultaneous drop in stocks and bonds are warning signs for new FOMC Chairman Warsh - volatility ahead?

The baseline expectation is that the FOMC will hold interest rates unchanged in a 10-2 vote, while keeping a potential September hike firmly on the table - what could surprise traders?

While hawkish hopes are perhaps too elevated, a surprising CPI report could still drive abnormal volatility in major markets given uncertainty around the FOMC’s near-term path under Kevin Warsh.

The FOMC was more hawkish than anticipated, with interest rates rising across the curve, stock indices edging lower, and the US dollar rallying - see what Chairman Kevin Warsh said and what it means!

Markets went into the meeting pricing little chance of an immediate move. They came out pricing an aggressive tightening cycle as the RBNZ signalled it’s prepared to crush inflation risks at almost any cost.

Kevin Warsh was sworn in as FOMC Chairman today but it will be difficult to cut rates now - the US Dollar Index (DXY) could be the beneficiary of rising US interest rates, with potential for a quick rally toward 100.00.

Powell’s decision to remain on the FOMC board preserves its independence and could lead to higher interest rates in the near term.

Markets expected a BOJ hold, but the detail beneath the decision was far more hawkish than the headline suggests

RBNZ lays the groundwork for hikes while easing energy risks fuel risk appetite. NZD/USD now at a make-or-break test of its February downtrend.

The FOMC's range of interest rate forecasts narrowed, showing that the committee has converged toward a more gradual, shallower rate cut path, driving yields and the dollar higher.

The Fed will almost certainly leave policy unchanged, but tweaks to the Fed's Summary of Economic Projections could shift the US economy closer to a “stagflationary” trajectory.

The RBNZ delivered a fully priced hold, but its projected tightening path fell short of market expectations, sending the Kiwi lower. Near-term pressure may persist, even as the broader uptrend remains intact for now.
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