The Fed meets today on policy. Here’s the pre-FOMC market view.
The Fed Open Market Committee meets today to set policy.
Ahead of the meeting, market participants expect nearly two quarter-point rate hikes by the end of the year.
Looking out one more month to January, two full quarter-point hikes are priced in.
Spotlight December 2026
CME FedWatch December 2026 Rate Hike Odds
- No Change: 9.1 percent
- One Hike: 33.1 percent
- Two Hikes: 37.6 percent
- Three Hikes: 17.4 percent
- Four Hikes: 2.8 percent
- At Least One Hike: 90.9 percent
- Two or More Hikes: 57.8 percent
That adds up to a weighted average projection of 4.05 percent, approximately 1.7 quarter-point hikes compared to today’s range of 3.50 to 3.75 percent.
The Problem for Warsh
If the market continues to put upward pressure on rates but Warsh insists otherwise, it will take Quantitative Easing (QE) or other market manipulations to maintain the Fed’s target.
However, Warsh wants to eliminate forward guidance and shrink the Fed’s balance sheet. The latter will only be feasible if the market agrees with the Fed’s target.
And removing forward guidance eliminates one tool for Fed manipulation.
So today’s meeting will be interesting for what Warsh says or does not say about Quantitative Easing.
What Should Warsh Do?
Hike rates.
That is my position, not what I expect Warsh to do. The number of dissents will be interesting if the Fed does not hike.
Meanwhile money supply and credit growth is rampant.
For discussion, please see How Much Credit Growth Does It Take to Expand Real GDP?
I keep thinking that the US credit rating will take another hit given the insane war spending.
So far only one downgrade since Trumps second
The FOMC dropped the ball by not hiking today. Business as usual at the Fed. Warsh has had zero impact as the FOMC chair. Captain Dunsel at the healm. Not catastrophic, but very disappointing.
More QE! More food for the golden calf! Another few trillion to the debt!
It’s a real wonder why Americans all have to live on massive credit card debt to get by these day. Surely it has nothing to do with the guys shoveling everyone’s cash into the mouth of a pre-biblical idol (gilded Trump statue for baby boomer blood sacrifices and Epstein child sacrifices soon™).
Maybe the better question is how we plan to explain to our kids how our nation descended into literal mental retardation. Maybe geezers were right about the old boob tube rotting minds.
Don’t worry guise….it’s not widespread…well, unless you actually start looking
You realize some states let noncitizens vote in local + state elections right? And if this evidence exists where are the noncitizen votes?
Just a crumb of proof Joe, you’re so close!
Whoppsiedoodles
So literally nothing numbers wise and no word if any of those ballots even got counted (they didn’t). Gosh what more proof do we need to pass the SAVE act??
Holy Sh!t boys…just got back…what I miss?
Should be a hoot to watch Trump squeal like a pig.
Trump wants rates at zero so he can borrow(steal) even faster.
The Ai bubble needs rates lowered to reissue the $3.2T in debt. Same for Trump. He’s added ~25% of the national debt and he doesn’t want to be around for the bill.
I saw we have the highest inflation of any of the “top economic countries”. I think that’s G7 or close.
I’m sure warsh wants to hike rates but he was hoping he could wait until after the midterms when Trump is a lame duck
itll be interesting to see if he holds out
Fauci. Up vote or down vote?
Get a life
Oops, I down voted. What I down voted was your comment, not your clever little trick.
Most of the cucks in this comment section are vaxxed and boosted
☠☠☠
Yeah, they should try licking door knobs at the hospital. You should try that too, actually.
Good morning Rabbi !