CIO Notebook: Warsh Walks the Narrow Path to Neutral

The Fed’s latest stance remains hawkish, as persistent inflation expectations and a resilient labor market give policymakers little reason to ease policy soon.

Geopolitical uncertainty is adding another layer of caution, reinforcing the case for keeping rates on hold while officials watch incoming data.

For investors, this suggests a market environment that may continue to favor selectivity over broad risk-taking.

Rate-sensitive assets could stay under pressure if inflation proves sticky, while higher-quality income and defensive exposures may offer more stability.