Warsh's Hawkish Tone Fuels Rate Hike Expectations

The US stock market remained relatively steady on Friday, despite growing expectations that the Federal Reserve will hike interest rates soon to combat high inflation.

According to data from CME Group, traders are now betting on a nearly 46% probability of a rate hike as soon as next month, up from 35% a day earlier.

Fed Chairman Kevin Warsh reiterated his commitment to keeping short-term interest rates low and allowing markets to react to incoming data rather than relying on Fed announcements.

Warsh's speech at the annual economic symposium in Jackson Hole, Wyoming, was closely watched for signs of a potential rate hike, but he emphasized that 'short-term interest rates are the predominant tool' for keeping inflation low and the job market strong.