More united Fed board seen at Warsh’s first meeting, according to Kalshi traders

Prediction market traders think consensus will return to the Federal Reserve’s policy-setting board when new Chairman Kevin Warsh presides over its June interest rate decision later Wednesday. At April’s meeting, the last under former Fed Chair Jerome Powell, four members voted to dissent from policy, the most in more than 30 years.

Traders on prediction market platform Kalshi place 70% odds on zero dissents in the June vote on the 12-member Federal Open Market Committee. Odds that four members will dissents, as in April, are at just 3%. 

The Fed is widely expected to hold interest rates steady on Wednesday at their current 3.50% to 3.75%, as policymakers continue to assess the extent of rising inflation due to higher oil prices stemming from the Iran war. 

At the April meeting, the Fed also held rates steady, and only one dissent disagreed with that decision. That vote was cast by now former Fed governor Stephen Miran, who consistently argued for lower interest rates. 

The other three dissenters — Fed regional presidents Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas — were opposed to language that hinted the central bank may cut interest rates in the future. That showed some members were worried the committee was too dovish in its outlook and objected to signaling lower rates were coming.

More than half, or 55%, of respondents in Bank of America’s June Global Fund Manager Survey said the Fed will deliver a “hawkish hold” on Wednesday. 

When Warsh holds his first press conference as chairman, traders think there’s a 73% chance he’ll discuss “uncertainty,” a 43% chance he’ll mention “quantitative tightening” and just a 20% chance he refers to President Donald Trump by name. 

Correction: This story has been revised to accurately reflect the titles of Beth Hammack, Neel Kashkari and Lorie Logan. A previous version of this story misstated that they were Fed governors, and also misspelled Kashkari’s first name.

Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.