Kevin Warsh is set to lead his first Federal Open Market Committee meeting as Federal Reserve chair today, June 17, and is expected to follow predecessor Jerome Powell in attributing elevated inflation to President Donald Trump's policies. U.S. inflation reached a three-year high of 4.2% in May, driven largely by an Iran-war-related energy supply disruption after Trump's February 28 attack on Iran led to the closure of the Strait of Hormuz, the largest energy supply disruption in history. Trump's sweeping tariffs on imports have also modestly increased production costs for some domestic manufacturers. While no change in the federal funds target rate is anticipated, the FOMC is likely to shift from an easing bias to a neutral stance, with the probability of a rate hike by December 2026 rising to nearly 60% according to the CME Group's FedWatch Tool. Warsh, known as a monetary hawk, may eventually support higher rates to combat inflation, a move that could pressure a historically expensive stock market reliant on low borrowing costs.
CME Group IncCME Group's FedWatch Tool is mentioned as showing rate hike probability, but the article does not discuss CME's business impact.
NVIDIA CorporationHigher rates pressure expensive stocks like NVIDIA, which rely on low borrowing costs.
Intel Corporation