Watching Warsh

The last week of July was subsumed by a volatile market and a news cycle dominated by coverage of the Federal Reserve’s (FOMC) Wednesday decision regarding interest rates. While it was the second such meeting under new chairman Kevin Warsh, unlike his first meeting last month, sentiment this go around pointed to the real possibility of a rate hike heading into the week. Market odds pre-meeting stood at about a one in three chance of hike. In the end, the final decision came down with the Fed standing pat and voting not to raise. This result is about what we expected, and marks the fifth consecutive meeting without a rate change. Interestingly, the vote was uneven and the FOMC was split 9-3 to hold the federal funds rate steady. Three regional presidents dissented in favor of a quarter-point hike. Dissenters underscored growing impatience with inflation that has run above the Fed's 2% target for more than five years...

Newsletter subscribers get market insights delivered in full to their inboxes.