Markets Price First Fed Hike Since 2023, Testing New Chair Warsh's Credibility

Ahead of next week's FOMC decision, market pricing has shifted to a majority probability of a rate hike—the first since July 2023—with sell-side flows on Friday reinforcing the move. The development tests the credibility of new Fed Chair Kevin Warsh amid doubts about the central bank's independence. The key uncertainty is whether the Fed will follow market expectations or push back against them.