Warsh Fuels October Rate-Hike Bets After 25-Basis-Point Move to 3.75%-4%
Updated
Updated · CNBC · Sep 18
Warsh Fuels October Rate-Hike Bets After 25-Basis-Point Move to 3.75%-4%
3 articles · Updated · CNBC · Sep 18
Summary
October hike odds rose to about 58% from 42% a week earlier after Kevin Warsh said the Fed had removed only “a dose of accommodation” with Wednesday’s quarter-point increase.
Warsh tied that language to a stronger U.S. economy and easier financial conditions, while dismissing the neutral-rate framework as academically useful but not operational for current decisions.
Goldman Sachs and Bank of America now expect another October increase, with BofA also forecasting a December move as Wall Street reads the remarks as a more open-ended tightening signal.
Fed funds futures imply a 4.635% rate by late 2027—roughly three or four more hikes—though some investors see the shift as mainly reversing 2025 “insurance” cuts rather than launching an aggressive cycle.