One Sentence From Fed Chair Kevin Warsh Delivers a Dire Warning to Wall Street and Investors
Key PointsIt’s been a year of historic change at the nation’s central bank, with new Fed Chair Kevin Warsh kicking off only the fourth rate-hiking cycle of the 21st century on Sept. 16.
During his tenure as the 17th head of the Federal Reserve since May 22, Chair Kevin Warsh has aimed to spearhead a reform-oriented central bank, causing Wall Street's major stock indexes - Dow Jones Industrial Average, S&P 500, and Nasdaq Composite - to take notice. Until mid-September, Warsh's most significant move was eliminating forward-looking guidance from Federal Open Market Committee (FOMC) meeting statements.
However, on September 16, he and the 11 other voting FOMC members initiated the fourth rate-hiking cycle of the 21st century. The FOMC increased the federal funds target rate by 25 basis points, setting it between 3.75%-4.00% to address the persistent issue of elevated inflation. Fed Chair Warsh and the FOMC agreed unanimously on the rate hike announced on September 16.
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