Fed week's hawkish test

Kim Khan· Host0:00

[intro music] Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Sunday, June fourteenth, and I'm your host, Kim Khan. It's Fed week with a big known and a big unknown. The known is that the Federal Reserve is widely expected to leave interest rates unchanged on Wednesday, with markets pricing in roughly a ninety-eight percent chance of no move. The unknown is what Fed Chair Kevin Warsh says in his first post-meeting press conference. Warsh stressed Fed independence during his confirmation hearings. Still, it would defy credulity to think he got the nod from the White House without signaling some sympathy for lower rates, something that President Trump has been calling for his entire second term. With inflation pressures tied to the closure of the Strait of Hormuz and stronger than expected recent jobs data, traders are currently pricing in a quarter-point hike by year-end. Seeking Alpha analyst Damir Tokic argues that if the Fed signals a more hawkish stance, markets will view that as a sign of credibility. However, he warns that a dovish or even neutral message could raise questions about whether monetary policy is becoming politically influenced. Investors will also be watching the Fed's dot plot and whether Warsh adds his own dot or abstains. Foreign officials have suggested Warsh may seek to overhaul the projections process, with some even speculating he could eventually eliminate the dot plot or other forms of forward guidance altogether. Looking to the sparse earnings docket, Accenture will be the highlight when it reports Thursday. Wall Street expects EPS