- Fed-funds futures price more than a 90% chance of an interest-rate hike at Wednesday's Fed decision, with market-implied expectations extending to additional hikes past the end of 2026, per CME Group data.
- A Kalshi prediction market puts a 44% chance on Trump publicly insulting Fed chair Kevin Warsh before the end of the year, more than double the level a month ago, though volume is tiny at roughly $120,000 since launch.
- Trump picked Warsh to replace Jerome Powell, whose tenure ended amid repeated public attacks over his reluctance to cut rates quickly; Powell remains on the Fed's board of governors.
- After Warsh's Jackson Hole speech reiterating that the Fed would bring inflation to heel, Trump said he respected Warsh and that the chair would 'do what he has to do', while continuing to insist US rates should be the lowest in the world.
- Pressure to hike has built as long-dated Treasury yields pushed to their highest levels in decades, driven by inflation concerns and an AI-investment boom absorbing capital that would otherwise flow into government bonds.
Quotes
“do what he has to do”
“The fed-funds rate, a benchmark overnight lending rate that his actively managed by the central bank, reached its near-term peak in the summer of 2023”