Markets are Unusually Uncertain about the Fed 🇺🇸 Markets are… — Tidbits w Dom — TG.ME

🏦 Markets are Unusually Uncertain about the Fed 🇺🇸 Markets are heading into the latest Federal Reserve decision with unusually high uncertainty. Traders are pricing in roughly a one-in-three chance of a surprise rate hike at Kevin Warsh’s second meeting as Fed Chairman. That level of uncertainty is rare in recent Fed history. Open interest in August federal funds futures also hit a record 967,000 contracts, as traders rushed to hedge against a surprise outcome. Warsh has rejected the forward guidance framework that made Fed decisions more predictable for the past two decades. If the Fed holds rates steady, markets will question whether Warsh is data-dependent or backing away from inflation pressure. If the Fed hikes, it would mark a sharp break from central bank norms and reset expectations for the tightening cycle. Either way, the first market reaction may be sharper than usual.