Fed Rate Hike Looks Certain, But Warsh Faces an Uphill Vote
Markets are pricing in a 92% chance of a Fed rate hike, with another likely in December. Warsh's confirmation battle adds political heat.
The Fed is almost certainly raising rates — traders have priced in a 92% probability, and that number doesn't lie. If you're still betting against a hike, you're fighting the tape. Close that trade.
Beyond the near-certain move, markets are already looking past it. A 75%-plus probability of a second hike in December is sitting in futures pricing right now. That's two hikes staring you in the face before the year is out. Position accordingly — bonds, rate-sensitive equities, and floating-rate anything all need a second look in your portfolio today.
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The political subplot here is Kevin Warsh, who faces a tough confirmation road as a Fed chair candidate. Warsh has historically leaned hawkish, and if he clears the Senate, the trajectory of rate policy in 2024 could shift meaningfully. This isn't just inside-the-Beltway noise — it has real implications for how aggressively the Fed moves once leadership changes hands.
For retail traders, the playbook is straightforward: stop fading the Fed. Two hikes in the pipeline, a potentially hawkish incoming chair, and a market that's already baking all of this in. Volatility isn't going away. The smart move is to understand what rising rates mean for every position you hold — because the Fed isn't blinking.
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