Federal Reserve Chair Kevin Warsh told central bankers in Sintra, Portugal, on July 1 that prices are too high and reaffirmed the Fed’s commitment to a 2% inflation target. At present, prediction markets Kalshi and Polymarket place the likelihood of a 2026 rate hike at 53% to 54%.
Key Takeaways:
Kevin Warsh said prices are too high at Sintra on July 1, 2026. Kalshi traders put 77% odds on a Fed rate hike before 2028. Bitcoin climbed near $60,000 after Warsh flagged easing inflation risk.“We’ve all looked around and we’ve seen that prices are too high, and I don’t think I’m the only one on this stage that’s recommitted to deliver price stability,” Warsh remarked.
Rate Hike Bets Build on Prediction MarketsMay 2026 consumer prices rose 4.2% year over year, the highest reading since April 2023. Core CPI climbed 2.9%. The Fed’s preferred gauge, core PCE, rose 3.4%.
Warsh’s first FOMC meeting on June 17-18 held rates at 3.50% to 3.75%, shortened the policy statement and removed language favoring rate cuts. The vote was unanimous, and the updated dot plot showed several officials expecting a hike later this year.
Markets ReactWarsh also addressed President Trump’s public calls for lower rates, saying the Fed remains independent of political pressure. He declined to preview the outcome of the next FOMC meeting, expected around July 29.
