Dramatic Change Since April

On April 24, the market expected an eighth of a point rate cut in July 2026, holding through January 2027, then a rate hike in March. That's roughly a 50 percent chance of a quarter-point cut with a quarter point hike in March of 2027.

On May 24, the market roughly expected a quarter point hike by January 2027, then another quarter point hike in March.

Looking further back, in March of 2026, the market expected one or two full rate cuts by the end of the year.

Trump's Outlook Not Changed

The market's outlook went from 1-2 cuts by the end of the year to two full hikes by March of 2027.

Trump expects Warsh to deliver rate cuts. Warsh won't come close.

FOMC Fireworks Coming Up

The fireworks start on June 17 when the FOMC next meets. That's 23 days from now.

At the June meeting, I expect the Fed will change from an easing bias to a tightening bias. Warsh will dissent but Trump will howl.

All eyes will then be on Warsh's first press conference as Fed Chair and Trump's Truth Social account for verbal fireworks.

Marriner Eccles, who served as Chair from 1934 to 1951, is the only Fed Chair in history to have formally dissented on a monetary policy decision. He cast three dissenting votes between 1938 and 1939 during his tenure.

Eccles will be in the media soon.