As the Wosh era is just getting underway, the market has already written the rate-hike script

When the Federal Reserve changes its leadership, the market’s first reaction is often not applause, but first checking whether their wallets are still there. The moment Kevin Wosh took office, traders began mentally inserting the words “tighter policy,” as if the interest-rate table would automatically switch to a higher gear in the next second. In CME’s “FedWatch,” the probability of another rate hike again within the year once hovered near 70%, showing that the market isn’t merely guessing anymore—it’s rehearsing in advance.

But the issue is that the market’s enthusiasm often moves half a beat faster than the Fed’s actions. Traders like to put the most hawkish script on the table first, as if simply being tense themselves would automatically make the risks disappear. Yet what the Federal Reserve truly cares about is inflation, employment, and financial conditions—not who has the loudest voice in a market group chat. If the June decision really leans hawkish, the premise must be that the data provides sufficient justification, not that it’s just because the new chair has taken office and “changed the style.”

So, the most likely situation in June isn’t necessarily an immediate and significant rate hike, but **firmer wording, more cautious forward guidance, and room to remain reserved about continued tightening in the future**. In other words, the market fills up the script first, but the Federal Reserve may not follow it. What’s really worth watching isn’t “whether it will scare people,” but “whether it will actually take action.” #美伊谈判博弈