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Central BanksMedium•29 June 2026•

1 min read

Expected Fed Rate Hikes May Not Materialize

Key Facts

1Wall Street braces for Fed rate hikes that may never come, as inflation is less severe and Chair Kevin Warsh appears less hawkish than perceived.

As markets await the path of US monetary policy, new analysis suggests that the wave of Fed rate hikes Wall Street braces for may never materialize. According to a MarketWatch report, inflation is less severe than many believe, and Fed Chair Kevin Warsh appears less hawkish than perceived, prompting a reassessment of rate hike odds.

These expectations come amid recent economic data showing resilience in the US economy, with the Composite PMI reaching 52.2 on June 23, per market data. Market estimates suggest that traders may have overpriced the extent of monetary tightening, especially as inflation continues to slow in some major economies.

With no major US inflation data immediately ahead, investors will watch for Fed officials' speeches and any shift in tone. Any confirmation that inflation is milder could support rate-sensitive assets, while markets remain cautiously watchful.