Warsh Withholds October Rate Signal as Markets Price 72.3% Odds of a Fed Hold
Updated
Updated · CNBC · Oct 16
Warsh Withholds October Rate Signal as Markets Price 72.3% Odds of a Fed Hold
3 articles · Updated · CNBC · Oct 16
Summary
Kevin Warsh said he would not prejudge the Oct. 27-28 Fed meeting, rejecting forward guidance and saying the central bank can still “go in any direction” later this year.
Goldman Sachs read the remarks as consistent with an October pause and still expects one final 25-basis-point hike in December; traders see a 72.3% chance rates stay at 3.75%-4% this month.
Warsh tied the backdrop to “synchronous tightening” by central banks worldwide, saying there are “no free riders” as countries confront the same inflation pressures.
Surging energy costs from the Iran war and an AI investment boom are lifting inflation and borrowing costs globally, even as public debt heads above 100% of world GDP.