Fed Warsh Signals Rate Hikes, Putting S&P 500 Records at Risk Ahead of CPI

Wall Street faces fresh pressure as Fed Chair Kevin Warsh and the FOMC signal a firmer anti-inflation stance just before Tuesday's CPI release. U.S. inflation has already reached a three-year high of 4.2% while core CPI sits at 2.9%, prompting the June FOMC minutes to stress price stability. Goldman Sachs now flags hotter-than-expected inflation as the top near-term equity risk, noting markets have priced nearly 50 basis points of tightening through mid-2027. The S&P 500's record highs, built on 10% year-to-date gains, look vulnerable if the Fed tightens into expensive valuations, with history showing typical early-cycle declines.