Markets Edge Higher as Kevin Warsh Faces First Fed Decision

Policymakers are widely expected to keep rates steady in the 3.50%-3.75% range when the announcement drops at 2:00 p.m. ET. While markets are pricing in a holding pattern for most of the year, CME Group data currently indicates a 43% probability of a 25-basis-point hike this December. Jefferies economist Mohit Kumar noted that Warsh will likely adopt a noncommittal tone to maintain alignment with the broader committee, though any commentary on inflationary pressures beyond the conflict could shift market sentiment toward a more dovish outlook.

Optimism regarding a potential U.S.-Iran peace deal has helped stabilize oil prices near three-month lows, providing a tailwind for broader equity recovery despite President Donald Trump’s warning that the agreement remains subject to change. This sentiment has bolstered chipmakers, with Broadcom, Micron, AMD, and Intel all posting gains between 1.5% and 3.5% in premarket trading. SpaceX also drew attention, climbing nearly 3% after surpassing Amazon in market valuation. Ahead of the Fed decision, traders are also parsing May retail sales figures to gauge the underlying health of the U.S. economy, which has already pushed the Dow to record highs over consecutive sessions.