The Odds of an Oct. 28 Fed Rate Hike Are Soaring, and President Donald Trump Is, in Part, to Blame
Key PointsFed Chair Kevin Warsh vowed to lead a reform-oriented central bank and just kicked off the fourth rate-hiking cycle of the century.
The odds of a Federal Reserve rate hike on October 28 are growing, with President Donald Trump partially responsible, according to recent analysis. Four months ago, Kevin Warsh, the newly appointed Federal Reserve chair, pledged to steer a reform-oriented central bank. He has thus far upheld this commitment by eliminating forward-looking guidance, appointing five task forces to enhance the Fed's monetary policy, and initiating the fourth rate-hiking cycle of the 21st century.
However, Wall Street's reaction to the Federal Open Market Committee's (FOMC) 25 basis point increase in the federal funds rate target from 3.75%-4.00% on September 16 has been somber. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all experienced declines. Investors are likely acknowledging that interest rate hikes are typically not a one-time occurrence.
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