The Federal Reserve kept rates unchanged in Chair Kevin Warsh's debut decision, but the hawkish pivot in the policy statement and updated economic projections suggests the new leadership is signaling a tighter-for-longer stance. The shift in projections — likely reflecting fewer cuts in the dot plot and upward revisions to inflation forecasts — marks a meaningful tone change from the Waller/Powell era and could reprice rate-cut expectations further out.
The immediate setup is a stronger USD, pressure on rate-sensitive equities (tech, utilities, REITs), and a bid for short-duration over long-duration assets. Key things to watch: follow-on Warsh commentary at the press conference, any revision to terminal rate estimates, and whether crypto and gold — both sensitive to real-rate expectations — reprice lower on the hawkish signal.