On Kalshi, the probability that Trump will publicly insult Warsh before the end of the year has risen to 44% An interest-rate hike from the Federal Reserve on Wednesday is seen as a virtual certainty by most of Wall Street, although some believe a hold is still possible. One thing is certain: President Donald Trump has been less than pleased with the recent trajectory of interest rates and has made clear his expectation that the Fed should move expeditiously to get borrowing costs down. Some traders on Kalshi are betting that Trump will soon pressure Fed Chairman Kevin Warsh, whom the president picked to replace his previous choice, former Fed Chair Jerome Powell.
One Kalshi prediction market now reflects a 44% chance that Trump will publicly insult Warsh before the end of the year, more than double where it stood a month ago. Infrastructure investing: A hedge against inflation and geopolitics?Play video: Infrastructure investing: A hedge against inflation and geopolitics? Trading volume in this market is relatively tiny, with about $120,000 changing hands since its launch earlier this year, according to Kalshi data.
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Trump has a history of clashing with Fed leadership, leading some critics to argue that the White House was unduly infringing on the central bank’s policy independence. The end of Powell’s tenure at the central bank’s helm was marked by a feud with Trump. In a series of Truth Social posts and comments to the media, Trump repeatedly taunted the Fed chair, calling him Jerome “too late” Powell for his reluctance to cut interest rates more quickly.
The Justice Department launched an investigation into Powell tied to renovations at a Fed building. Powell remains on the central bank’s board of governors. Traders overwhelmingly expect the Fed to hike rates on Wednesday, with fed-funds futures — a trading instrument to hedge the path of Fed interest rates — reflecting more than a 90% chance of a hike.
The market is starting to expect more hikes even beyond the end of 2026, according to data from CME Group. Since the beginning of the central bank’s modern era about 50 years ago, it has been extraordinarily rare for a sitting Fed chair to dissent on a decision on interest rates. The most notable example occurred in 1986, when then-Chair Paul Volcker was outvoted by his fellow Fed governors in a decision to cut the discount rate, an interest rate charged to banks for collateralized short-term loans.
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