Warsh's first meeting lands like a hike without the hike

Kevin Warsh held rates at 3.5-3.75% yesterday and still managed to send two-year Treasury yields up 15 basis points, because the message was the meeting, not the decision. The dot plot showed nine of eighteen FOMC officials expecting at least one rate increase by year-end, five of those expecting two, and the Fed's own PCE inflation forecast was revised sharply upward to 3.6% for 2026. Warsh's press conference dropped the easing bias entirely, shortened the statement to four paragraphs, and explicitly refused to offer forward guidance, which means every data release between now and December is now a live event. Interest-rate swaps are fully pricing one hike by year-end, a full reversal from the multiple-cuts consensus that greeted Warsh's nomination. Trump is publicly pushing for cuts. Half the FOMC is leaning toward raises. For UK borrowers, CFOs pricing 2027 refinancing, and anyone long duration, the working assumption of higher-for-longer just got an institutional mandate behind it.