Markets underprice October Fed hike risk as Warsh drops forward guidance

CNBC · 2 hours ago
Markets underprice October Fed hike risk as Warsh drops forward guidance
  • Futures priced a 15% probability of an October rate hike as of Friday morning, October 16, 2026, ahead of the FOMC meeting on Oct. 28.
  • Chair Kevin Warsh has repeatedly rejected the convention of signaling his plans before FOMC meetings, which the article argues leaves investors complacent about an October hike.
  • Vice Chair Philip Jefferson and New York Fed President John Williams recently signaled little urgency to raise rates, and markets repriced toward a hold in October.
  • Warsh's September stance was strongly hawkish, setting up a unanimous FOMC rate hike in September, and he disclaimed the Summary of Economic Projections as his own forecast.
  • The article projects core PCE inflation at 3.1% year over year following the latest CPI and PPI readings.

Quotes

“The world has broadly conformed to our expectations”— Kevin Warsh
“Those aren't my forecasts”— Kevin Warsh

Sources