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Warsh delivered an unexpected jolt to Wall Street with a hawkish pivot that put Federal Reserve rate hikes back on the table, even as the Federal Open Market Committee voted to leave rates unchanged.
The move triggered a dramatic shift in market sentiment. With the FOMC reaffirming that inflation remains its top concern, the hold is now secondary to the signal.
The Hold That Wasn't the Story The FOMC's decision to stand pat on rates would ordinarily read as a pause, a moment of watchfulness.
What reordered market positioning was Warsh's hawkish turn — a posture Wall Street had not priced in.
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