The Federal Reserve is expected to raise interest rates by 25 basis points tonight, with the market watching whether Warsh signals continued rate hikes.

The market widely expects the Federal Reserve to raise interest rates by 25 basis points tonight, increasing the federal funds target range to 3.75%-4.00%. However, major Wall Street institutions hold divergent views on the policy path after the rate hike. Citi and Goldman Sachs anticipate this will be a "dovish hike," with the Federal Reserve possibly refraining from actively signaling continuous rate increases, and the dot plot potentially showing only one more hike this year. Standard Chartered Bank holds the opposite view, considering the September rate hike a policy error. JPMorgan Chase and Goldman Sachs analyze that if the Federal Reserve raises rates as expected but refuses to provide clear forward guidance, the yield curve could steepen and offer moderate support to equities; if Warsh unexpectedly delivers strong hawkish signals, it would trigger a comprehensive surge in interest rate volatility. Furthermore, Donald Trump recently reiterated that the U.S. should have the lowest borrowing costs globally, and a rate hike could lead Federal Reserve Chair Warsh to face criticism from the White House.