Kevin Warsh Said the Fed Has "No Tolerance" for Inflation and Is Charting a "New Course" on Monetary Policy. J.P. Morgan Analysts Expect Rates to Hold Steady Through 2026.

New Federal Reserve Chair Kevin Warsh stated the Fed has "no tolerance for persistently elevated inflation" but offered no guidance on the timing of future rate moves. J.P. Morgan analysts forecast the central bank will hold rates steady through 2026, with the next hike potentially arriving in Q3 2027. The Fed remains split on policy direction, with half of policymakers favoring higher rates by year-end while the other half prefer to hold or cut. Warsh's comments signal a hawkish tone on inflation without committing to a tightening timeline, leaving markets to parse institutional forecasts for clues. The J.P. Morgan outlook implies no rate relief for borrowers or rate-sensitive equities through at least the next two years, a stark departure from earlier market expectations of cuts in 2025.