Will New Fed Chair Kevin Warsh Shock the Market and Deliver a Surprise Rate Hike at the Fed's July Meeting?

The July 29 FOMC decision carries a 31.5% probability of a surprise rate hike in betting markets, even as analyst Bram Berkowitz argues against the move. Fed Chair Kevin Warsh faces conflicting pressures heading into the conclusion of the July meeting, with some FOMC members advocating for tighter policy while external factors point toward holding rates steady.

Berkowitz cites three countervailing forces: recent inflation deceleration, political pressure from President Trump, and potential geopolitical developments that could reduce energy prices. The combination suggests Warsh is more likely to maintain the current rate despite hawkish voices within the committee.

The nearly one-in-three odds priced into betting markets indicate meaningful uncertainty around the decision. A rate hike would mark a sharp departure from current market expectations and likely trigger volatility across equities and fixed income. The meeting concludes Wednesday, with the rate decision and accompanying statement due in the afternoon.