Warsh's Unpredictable Fed Sets Stage for Market Volatility

Stocks are experiencing modest pressure ahead of a key Federal Reserve meeting, where new Chair Kevin Warsh is expected to offer less forward guidance compared to his predecessors.

The Fed's monetary policy meeting comes as the outlook for inflation and growth becomes increasingly uncertain. As a result, markets are pricing in about a one-in-three chance that the Fed will hike its interest rate target by 25 basis points, from 3.5% to 3.75%. This is despite no rate adjustments since late-2025.

Meanwhile, crude oil prices have spiked due to surprise missile attacks launched by Iran against US forces in the Middle East. WTI crude futures are trading around $84 a barrel, up from the high-$60s a month ago. This has put downward pressure on gold and silver.