Fed Chair Kevin Warsh Pushed September Rate Hike Odds Past 50%. But 1 Investor Says the Market Has It Wrong

NVDA guided Q3 revenue to $108B and is up 22% year to date, the highest-beta play if Warsh holds rates steady September 16.

Bill called the market's 55% September rate hike odds "offsides," arguing Warsh softens once August CPI and PPI data roll in.

Despite the 10-year yield climbing to 4.66%, the S&P 500 is up 13% year to date with corporate earnings absorbing rate pressure.

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Three weeks before the Sept. 16 FOMC meeting, the bond market has flipped hawkish. Market-implied odds of a September rate hike jumped to roughly 55% after Kevin Warsh's Jackson Hole debut as Fed chair, up from about 40% a week earlier, even though the Fed's last move was a cut on Dec. 10, 2025 and the target has been pinned at 3.75% ever since.

His line that "it's hard to say that Fed policy is restrictive when you look at the economy right now" was read on CNBC as a straight hike signal. Former Fed Vice Chair Roger Ferguson said on August 28 that he expects two rate hikes and warned that standing pat would cost the Fed credibility.

The contrarian: CNBC Investment Committee member Bill called the 55% probability "offsides," arguing Warsh softens once data clears.

The 10-year Treasury yield hit 4.66% on August 26, up from 4.19% in January, yet the S&P 500 tracking ETF is still up about 13% year to date. The earnings counterweight: NVIDIA ( NASDAQ:NVDA ) just posted $96.22 billion in Q2 revenue and guided Q3 to $108.0 billion, with $279 billion in supply commitments locked in.

Profit angle: If Bill is right and Warsh blinks on Sept. 16, NVDA is the highest-beta way to press the trade. Its approximately 70% fiscal 2028 growth outlook is largely insulated from short-term rate moves.

Watch for the August CPI and PPI: hot readings validate the hike, cool readings weaken the odds and re-rate mega-cap growth higher. Shares traded near $220 on Monday. Aug. 31, up 16.50% year to date.

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