Financial markets are increasingly preparing for higher interest rates after the Federal Reserve signaled a more hawkish outlook and Chair Kevin Warsh reiterated the importance of keeping inflation under control.

At its June 17 meeting, the central bank unanimously voted to keep its benchmark interest rate unchanged at 3.5% to 3.75%, but its latest projections showed growing support for higher rates, with nine officials forecasting hikes and six expecting multiple increases.

Investors now see more than a 75% chance of at least one rate hike this year, according to the Atlanta Fed’s Market Probability Tracker.

The changing outlook reflects ongoing concerns about inflation, including persistent core price pressures and rising energy costs associated with geopolitical tensions. Warsh has consistently stressed the Fed’s commitment to controlling inflation despite not directly commenting on policymakers’ projections.

Treasury Secretary Scott Bessent has also fueled expectations that the administration would tolerate tighter monetary policy if necessary.

He said in an interview that Warsh would act independently and choose the best path for inflation and growth, while noting that President Donald Trump has full confidence in the Fed chair. The remarks suggest the White House may be more accepting of potential rate hikes than many investors had previously assumed.