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The Federal Reserve just told us to forget EVERY rate cut we were promised.
And anyone trading the old narrative basically got run over.
Here's what happened yesterday:
June 17, 2026.
Kevin Warsh chaired his first FOMC meeting as Fed Chairman.
The decision itself was boring. Rates held at 3.50% to 3.75%. Markets expected it.
Then the projections dropped.
Six months ago, the Fed's own dot plot showed one rate CUT coming in 2026.
Yesterday, that flipped to one rate HIKE.
Nine of 18 officials want higher rates this year. Six of those nine want TWO quarter-point increases.
Three months ago, zero officials penciled in a hike.
That's a 50 basis point swing in expectations.
In one quarter.
And Warsh himself refused to submit a projection at all.
He told reporters dot plots aren't "helpful."
The most hawkish signal a Fed Chair can send without saying a word.
The results?
The S&P 500 dropped 1.21%.
The Nasdaq fell 1.34%.
The Dow lost 507 points after touching a fresh all-time intraday high earlier in the day.
The 2-year Treasury yield surged 16 basis points to 4.21%.
The 10-year hit 4.49%.
CME FedWatch now shows a 60.7% chance of a rate hike by October.
Some Wall Street desks have it above 90%.
Six months ago, the same tool was pricing in three cuts for 2026.
Read that again.
Three cuts to one hike. In six months.
Now let's talk about what this means for your investments:
Retail investors entered 2026 with a clear thesis:
- Inflation was cooling
- Powell was out. Warsh was in
- Trump wanted rates lower
- Rate cuts were coming
That story drove every major trade of the past 12 months.
Yesterday, that narrative collapsed.
The economy isn't weak enough to cut into.
And it's hot enough to potentially hike into.
Warsh said it directly: "Persistently high prices are a burden for the American people."
Translation: cuts are off the table. Hikes are on it.
Trump appointed Warsh expecting cheaper money.
Yesterday, Warsh told reporters he hasn't communicated with Trump about anything.
Then he formed five task forces to overhaul how the Fed operates.
A new chair. A new framework. A new direction.
Trump's response when asked about a hike? "Hard to believe."
Even the man who picked him didn't see this coming.
The investors who survive this transition aren't the ones with the best Fed take.
They're the ones whose strategy doesn't require a Fed take at all.
Systematic. Rules-based. Adjusts automatically when the inputs change.
That's what Surmount was built for.
Automated strategies that don't flinch when the narrative does...
Video
— https://nitter.net/SurmountInvest/status/2067608396547940781#m