The Odds of an Oct. 28 Fed Rate Hike Are Soaring, and President Donald Trump Is, in Part, to Blame

Four months ago, when Kevin Warsh was sworn in as the new Fed chair, he vowed to lead a reform-oriented central bank. Thus far, he's stuck to his word by removing forward-looking guidance, commissioning five task forces to aid in the Fed's conduct of monetary policy, and overseeing the start of only the fourth rate-hiking cycle in the 21st century.

Wall Street's initial reaction to the Federal Open Market Committee (FOMC) raising the federal funds target rate by 25 basis points on Sept. 16 to 3.75%-4.00% was melancholy, with the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) all declining. Investors likely realize that interest rate hikes are rarely, if ever, a one-time event.

Two of President Trump's policies are directly affecting consumer prices. Image source: Official White House Photo by Joyce N. Boghosian.

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