FOMC Hawkish Shift Priced; Focus on Warsh's First Meeting

Markets are pricing a definitive hawkish pivot at next week's FOMC meeting — removal of the easing bias, higher inflation forecasts, and median dots pushing rate cuts into 2027 — with new Chair Kevin Warsh's communication style the wildcard; the cross-asset implication is rising long-end yields and a firmer USD, challenging risk parity's stock-bond negative correlation.

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