Market Lab Report - On today's Fed testimony on rates

Published:

17 Jun 2026 06:12 ET

The new Fed chair's decision on rates and testimony is today at 2 pm and 2:30 pm, respectively.

At the time of this writing, CME FedWatch is pricing in one rate hike in December 2026: 42.2% (25 bps hike) vs 41.3% (no hike).

During Warsh's testimony, watch for the following:

Kevin Warsh is likely to deliver a **slightly hawkish but not extreme** message:

- **Rates**: Almost certainly **unchanged**.
- **Dot Plot**: Could show **one or two more hikes** in 2026. One late in the year (agreeing with CME FedWatch at present) would be bullish.
- **Tone**: He will probably sound more concerned about inflation than his predecessor, but he’s unlikely to come out swinging with very aggressive rhetoric in his first press conference.
- **Market reaction**: The biggest risk to tech stocks is not a rate hike *this week*, but confirmation that the **path of least resistance** for policy is now **higher rates**, not lower ones.

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