The Federal Reserve held rates steady at its latest meeting, but the updated dot plot reveals a hawkish tilt: policymakers are divided between standing pat all year and actually raising rates, a meaningful shift from earlier expectations of multiple cuts in 2025. Kevin Warsh, a prominent hawk, is set to address the economy, adding further weight to the tightening-bias narrative. The inflation outlook has deteriorated enough that the FOMC's central tendency now leans toward no easing this cycle.

The second-order setup is a repricing of the front end of the Treasury curve and a continued squeeze on rate-sensitive sectors — utilities, REITs, and long-duration tech. The key things to watch are: whether the 2-year yield breaks meaningfully above recent highs, how equity markets absorb the no-cut baseline, and whether Warsh's remarks hint at any formal role in future Fed leadership that could further anchor hawkish expectations.