Federal Reserve Chairman Kevin Warsh's description of this week's quarter-percentage-point rate hike as removing "a dose of accommodation" rather than tightening policy has left Wall Street debating how many more increases may follow. The benchmark rate now sits in a target range of 3.75%-4%, and Warsh declined to say how far above neutral he views it, telling CNBC's Steve Liesman that measuring the rate against neutral is "useful academically" but has no operational effect on decisions. Evercore ISI's Krishna Guha called the phrase "the one stand-out hawkish element" of Warsh's post-meeting commentary and said it raises the possibility of a more open-ended approach to the number of hikes that might be required. Goldman Sachs and Bank of America both added an October increase to their forecasts, with Bank of America also expecting another move in December, and market-implied odds of an October hike rose to near 58% Friday morning from 42% a week earlier, according to CME Group's FedWatch gauge. Futures imply a fed funds rate of 4.635% near the end of 2027, suggesting three or four more hikes ahead, though Natixis Investment Managers Solutions' Jack Janasiewicz said he remains unconvinced this is the start of an aggressive new tightening cycle and sees it instead as a removal of the insurance cuts the Fed delivered in the fall of 2025.
Bank of America Corp
Evercore Partners Inc
Goldman Sachs Group Inc
Goldman Sachs BDC Inc
CME Group Inc