Kevin Warsh Wanted a ‘Family Feud’ at the Fed; At Wednesday’s Meeting He Might Get One
Federal Reserve Chairman Kevin Warsh keeps predicting a Fed "family fight." Wednesday's policy meeting could finally deliver a real one, with economists expecting at least two hawkish dissents over interest rates.
Warsh has used the phrase 13 times since his April nomination hearing, according to a CNBC tally. His first meeting as chair ended in a unanimous hold last month.
A Feud That's Been Building for Months
Wall Street expects a different outcome this week. JPMorgan's Michael Feroli predicts a contested vote. He names Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan as likely dissenters.
"The July FOMC will be a family feud… just as Kevin Warsh intended."
Oscar Munoz, TD Securities
TD Securities' Oscar Munoz agrees. Traders are already repricing the odds. CME Group's FedWatch tool now shows 34.2% odds of a quarter-point hike, up from 12.8% just a week ago.
Oil and Chips Are Feeding the Feud
A collapsed U.S.-Iran ceasefire has pushed oil prices higher again. Brent crude climbed back above $100 a barrel, undoing the recent oil price relief. But a recent pause in hostilities has brought that price back down for the moment.
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