Fed Chair Warsh Offers No Rate Signal as December Hike Bets Stay Elevated

Federal Reserve Chair Kevin Warsh declined to signal the central bank's next move while speaking at an IMF meeting in Bangkok on Friday, leaving markets to parse a week of hotter-than-expected inflation data.

According to CME FedWatch, the chance of a rate hike at the late-October meeting slipped to about 17% from 28%, while odds of a December hike remained high, with estimates ranging from roughly 74% to 89% depending on the source. The 10-year Treasury yield settled near 5.09%, below the 5.33% peak it touched after Wednesday's CPI report.

Separately, the U.S. fiscal 2026 budget deficit reached $1.99 trillion, a five-year high, adding another variable for bond investors already weighing persistent inflation and elevated oil prices.