Wall Street fixates on timing of next Fed rate hike under Warsh

With the Iran war edging toward resolution, pump prices falling, chip stocks in a lull and SpaceX not joining a major index until July, the Federal Reserve has reclaimed center stage. Last week's FOMC meeting and newly appointed chair Kevin Warsh's first presser gave investors a rare look at the central bank's internal debate.

The committee was split: exactly half of the 18 voting officials supported a rate hike, and Warsh moved away from forward guidance. Investors read the session as hawkish, focusing on inflation and the fact that six of nine rate-hike backers signaled support for multiple raises in 2026.

Stocks fell and bond yields spiked as market participants weighed the shift; the debate marks a clear change from March, when no policymakers had a hike penciled in and the committee was signaling a cut. Market odds for the first hike have accelerated in response.

United States

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