In 7 Words, Fed Chair Kevin Warsh May Have Just Confirmed the Stock Market's Biggest Fear
Yahoo Finance ·
Major market indexes have been surging lately, with the S&P 500 ( ^GSPC +0.16% ) and Nasdaq Composite ( ^IXIC +0.33% ) up by 22% and 28%, respectively, over the past 12 months. However, that growth could potentially slow going forward, as Federal Reserve Chair Kevin Warsh recently suggested that the central bank may be poised to raise interest rates. "[W]e've seen that prices are too high," he noted during a July panel discussion with CNBC. While that seven-word phrase may sound innocuous, it hints that the Fed will be more hawkish. Interest rate increases can help rein in inflation , but they can also put a damper on the stock market. Here's what that may mean for investors. Image source: Official Federal Reserve photo. To be clear, there's no way to predict exactly what the Fed will do or how Wall Street may respond. However, CME Group 's FedWatch tool, which uses 30-Day Fed Fund futures pricing data to predict future rate moves, estimates a nearly 90% chance that the Fed will raise interest rates by December 2026.
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