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Markets are suddenly revisiting the “what if” scenario of a 100bps Fed rate hike as Kevin Warsh steps in as Fed Chair.
Inflation isn’t cooling as smoothly as expected, energy shocks are still in play, and policymakers are now facing a tougher reality: sticky prices may force a more aggressive stance than markets priced in.
What looked like a cycle of patience could quickly turn into a cycle of tightening.
If inflation stays elevated, is the market underestimating how hawkish the new Fed could get under Warsh?
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