4 Words From Fed Chair Kevin Warsh Should Have Wall Street and Investors Quaking in Their Boots

The CME FedWatch Tool now shows a 65% probability of at least 75 basis points in Fed rate hikes by September 2027, a pricing that puts tightening, not easing, on the table for the AI-driven bull market.

The catalyst: Fed Chair Kevin Warsh's four-word comment on price stability, "we're working on it." Per the source, that line signals forthcoming hikes. The FOMC faces inflation pressure from three named sources: Trump's tariff policies, the Iran war, and the AI infrastructure build-out.

The piece argues higher rates threaten the debt-financed AI build-out and could erode stock market gains. NVDA sits at the center of that trade as the AI-linked name most exposed to any slowdown in infrastructure spending. That linkage is interpretation, not a reported fact.

The 65% figure is notable for its size and its horizon. Traders pricing a September 2027 endpoint are looking at a long tightening runway rather than a single adjustment. Interpretation: if markets treat Warsh's remark as confirmation rather than a one-off, the repricing could extend beyond rate-sensitive sectors into the AI names that have driven index returns.

CME's FedWatch probabilities will move with each Fed communication, making them the cleanest real-time gauge of how much of this is already priced.