Fed rate decision: Kevin Warsh begins his term, markets hold breath

The Federal Reserve's Wednesday meeting marks the first FOMC session presided over by former White House adviser Kevin Warsh. His views have been a source of market uncertainty: some analysts cast him as more hawkish than Powell, others as more pragmatic. In CNBC's latest survey, a large majority of respondents expect the policy rate to remain unchanged, while the number of cuts priced in for the rest of the year has been revised higher in recent weeks.

The most-watched detail in Warsh's communications is the scope of the dot plot in the Summary of Economic Projections. According to reports, Warsh may opt not to submit his own projection to the dot plot, a move that would add another layer of difficulty for markets parsing the statement. Economists note that this would mark a break from the communication model that defined the Powell era.

The decision arrives as Brent has fallen following the US-Iran framework agreement. The easing of the oil shock has cooled the inflation outlook, with headline CPI coming in below expectations in May. Even so, Fed officials remain cautious about tariff pass-through and the stickiness in services inflation; what markets most want from Warsh is a read on how that balance is being interpreted at the new Fed.