MSX Research Institute said in its latest daily note on U.S. equities and RWA that markets pulled back rate-cut expectations after new Federal Reserve Chair Warsh kept a hawkish line during two consecutive days of congressional testimony, despite a softer-than-expected June CPI print earlier in the day.
June CPI cooled, but stayed above the Fed’s target
According to the figures cited by MSX, June CPI rose 3.5% year over year, down from the previous 4.2%, while core CPI came in at 2.6%. Both readings were below expectations, but still above the Federal Reserve’s 2% inflation target.
MSX said Warsh framed inflation with “zero tolerance,” played down the significance of a single month’s data, and dropped forward guidance. Combined with oil prices moving back above $80, that was enough for the market to take back the rate-cut pricing that had briefly strengthened.
July hold now in focus, with September drawing attention
The report said the market’s reading across Warsh’s five main policy areas is hawkish on inflation and monetary policy, neutral on independence and reform, and dovish only on AI.
For the policy path, MSX said markets are betting on no move at the July 28-29 FOMC meeting. Attention around a possible hike has shifted to September, with probability at about 60%. The note also put the implied probability of zero rate cuts in 2026 at roughly 80%.
MSX view: softer inflation does not equal easing
In its market take, MSX said a softer CPI report meeting a hawkish new chair leads to one conclusion: cooling inflation does not mean rate cuts. The institute said Warsh appears to want clearer evidence that inflation has returned to target, rather than a policy turn based on one or two better monthly readings. In its view, that keeps the “higher for longer” line intact.
For U.S. stocks, MSX said the setup could weigh on richly valued growth names in the short term, though companies with strong enough earnings may still hold up. It said the next dividing line will be July 30 core PCE data and the earnings reports that follow from major companies.
About MSX
MSX describes itself as an RWA trading platform focused on access to global financial markets. The platform said it is among the earlier on-chain U.S. stock trading venues globally and offers spot and derivatives trading tied to nearly 400 tokenized stocks and Pre-IPO assets.
MSX also said it has built a broader digital finance offering covering U.S. stock spot trading, perpetual contracts, crypto-to-crypto trading, Pre-IPO products, and research services through the MSX Research Institute.
The platform added that macroeconomic conditions and U.S. equity markets remain highly volatile, and that the note is for academic and research observation only and does not constitute investment advice.