Fed's Knife-Edge Decision: Hold or Hike as Inflation Stubs Toe on Housing and Confidence Fades

The Federal Reserve convenes today in its most finely poised meeting since December 2018, with markets pricing a 32% chance of a surprise 25 basis point rate hike despite a baseline expectation to hold the Federal Funds Rate at 3.50%-3.75%. The decision comes as Chair Kevin Warsh faces intense pressure to prove his inflation-fighting credentials against a backdrop of elevated prices and renewed geopolitical risk.

Behind the Data

The case for a...