Fed Chair Kevin Warsh Sends a Blunt Warning to Wall Street. What Should Investors Do?
New Fed chairman Kevin Warsh has made it clear that he is not here to rescue stocks.
Overview
When President Donald Trump helped push out Federal Reserve Chairman Jerome Powell, he was looking to replace him with someone who would lower interest rates and help prop up stock prices. However, the person he appointed to replace Powell appears to have a vastly different idea.
Instead of cutting rates as Fed chief at his first meeting, new Fed chairman Kevin Warsh kept rates steady while issuing a terse statement that ended with: "The Committee will deliver price stability." The implication of his message was clear: Not only are rate cuts off the table, but interest rate hikes are also more likely in the future.
Details
This was also confirmed by the Fed Dot Plot, a quarterly graph that tracks where each Fed member predicts future interest rates are headed. The graph showed that the vast majority of members predicted rates to be steady or higher this year, with about half expecting at least one rate increase and a third expecting two or more hikes.
Source
Originally published at www.fool.com.