Kevin Warsh’s hawkish policy stance and recent rate actions form the core driver behind trader consensus that the federal funds rate will remain above 2.5% during his tenure. As Fed chair, he has prioritized inflation control, delivering the first rate hike in three years in September 2026 to a 3.75-4% target range amid stubbornly elevated price pressures and resilient growth. His Jackson Hole remarks and subsequent communications emphasized financial conditions over forward guidance, with projections signaling at least one additional increase this year and limited easing ahead. This empirical approach, backed by unanimous FOMC support, has reinforced market pricing for sustained higher rates. Only a sharp, unexpected disinflation or severe downturn would likely shift that outlook.