Fed Meeting Outcome May Spark Market Volatility Amid Trump's Rate Cut Push

The Federal Reserve's upcoming meeting is set to take place on Wednesday afternoon, where new Fed Chairman Kevin Warsh will announce whether interest rates will remain steady, be cut, or raised. President Donald Trump has been advocating for rate cuts, stating that 'rates should be lowered' and calling Warsh 'fantastic'. However, the majority of Benzinga viewers polled predict that rates will stay the same, with 80% expecting no change.

The CME Group Fed Watch Tool also indicates a high probability of no change, with 66.3% expecting this outcome. Only 15% of Benzinga viewers see a rate hike, which could lead to Trump taking a different tone in support of Warsh. Prediction market Kalshi shows a 28% chance of a rate hike announcement, nearly double what Benzinga viewers predicted.

The SPDR S&P 500 ETF Trust (NYSE:SPY) is trading down 1.18% ahead of the meeting, with rate hikes being considered bad for the stock market. A rate cut could see the market spike with optimism, while news of rates being left unchanged could lead to a rally this afternoon.