The Fed Hikes Against the White House’s Wishes

In this Fed meeting recap, Kent Fung analyzes the September 2026 FOMC decision to raise interest rates and what it suggests about Federal Reserve independence under Chair Kevin Warsh amid very public pressure from President Donald Trump. The report reviews how markets priced the decision in the days leading up to the meeting using Fed funds futures, and how recent Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data shaped expectations. Fung also details the unanimous FOMC vote, the key messages from Warsh’s press conference, and the latest Summary of Economic Projections (SEP), including how policymakers are balancing the Fed’s dual mandate of price stability and maximum employment.

The report then examines the immediate market reaction across major indices and volatility, focusing on moves in the S&P 500 and the CBOE Volatility Index (VIX), and incorporates perspective from Fundstrat’s Tom Lee on macro implications and Mark Newton on technical setup. Fung explores how the committee’s stated focus on inflation, its views on economic strength and unemployment, and the timing of upcoming events such as the November midterm elections and the late-October FOMC meeting intersect with concerns about political influence on monetary policy. The full piece includes detailed discussion of Fed communication, independence, and potential constraints on future rate decisions.

In this Fed meeting recap, Kent Fung analyzes the September 2026 FOMC decision to raise interest rates and what it suggests about Federal Reserve independence under Chair Kevin Warsh amid very public pressure from President Donald Trump. The report reviews how markets priced the decision in the days leading up to the meeting using Fed funds futures, and how recent Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data shaped expectations. Fung also details the unanimous FOMC vote, the key messages from Warsh’s press conference, and the latest Summary of Economic Projections (SEP), including how policymakers are balancing the Fed’s dual mandate of price stability and maximum employment.

The report then examines the immediate market reaction across major indices and volatility, focusing on moves in the S&P 500 and the CBOE Volatility Index (VIX), and incorporates perspective from Fundstrat’s Tom Lee on macro implications and Mark Newton on technical setup. Fung explores how the committee’s stated focus on inflation, its views on economic strength and unemployment, and the timing of upcoming events such as the November midterm elections and the late-October FOMC meeting intersect with concerns about political influence on monetary policy. The full piece includes detailed discussion of Fed communication, independence, and potential constraints on future rate decisions.

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