2 Words From Fed Chair Kevin Warsh Are Echoing Through Wall Street and Unnerving Investors

Fed Chair Kevin Warsh's emphasis on a "timely return" of inflation to the 2% target suggests more aggressive rate hikes are coming, with a 75% probability of a quarter-point hike in December. This aggressive rate-hiking cycle poses risks to the stock market, which is trading at historically expensive valuations (Shiller P/E above 40) with limited margin for error. Higher lending costs could slow the AI infrastructure build-out, the market's premier catalyst, potentially triggering significant corrections.