Trump Walks Back Rate-Cut Promise as Warsh Nomination Tests Markets

In a Fortune interview, Trump hedged about rate cuts until the war ends, signaling a shift from his campaign‑trail stance that rate reductions were a requirement for Fed chair candidate Kevin Warsh. With inflation still above target (PCE 3.5% y/y, core 3.2%), long rates have risen (10-year yield around 4.67%, mortgage rates near 7%), and markets have largely priced out cuts. Kalshi now shows a rising odds of a rate hike by July 2027, suggesting Warsh may face pressure to raise rates rather than cut them. Warsh’s confirmation hearings will test whether he commits to any rate-cut timeline or accepts higher rates to anchor inflation expectations.