Kevin Warsh Navigates A Hawkish Fed Shift

New Fed Chair Kevin Warsh is expected to guide the FOMC toward a more hawkish stance on inflation without committing to immediate rate hikes. ING projects that the Fed will hold rates steady for an extended period to evaluate energy-related inflation impacts.

Key Takeaways

• 1.The Fed is expected to maintain stable rates but adopt hawkish rhetoric in the FOMC statement.
• 2.New Fed Chair Kevin Warsh is expected to avoid forward guidance and prioritize reducing the Fed's balance sheet.

Table of Contents

• Inflation and regained momentum swing hawkishly
• Unanimous vote for stable rates
• ING's expectations for the Federal Reserve's central projections
• An extended pause is our call
• Now's the chance for Chair Warsh to walk the talk on balance sheet reduction
• Dollar can hold gains

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