Investing.com -- Federal Reserve Chairman Kevin Warsh could trigger bond market swings during his first press conference today, according to portfolio managers at Fidelity Investments.

The central bank is widely expected to hold its policy rate at 3.5%-3.75% and adjust its statement to a neutral stance, removing the easing bias that has been in place since rate cuts began in 2024. The uncertainty centers on how Warsh will communicate the Fed's views on inflation during his debut appearance following the policy decision.

"It's an interesting setup because while no one's really expecting the Fed to actually do anything, there probably is some potential for volatility just because we don't know how Warsh is going to communicate," said Julian Potenza, a fixed-income portfolio manager at Fidelity Investments, in an interview on Tuesday. "It's not uncommon for the markets to test a new chair."

Some Fed officials, concerned about elevated inflation, are expected to signal possible rate increases through the quarterly dot-plot for 2026 and potentially for 2027.

The $31 trillion Treasury market has faced uncertainty from a war with Iran that pushed oil prices higher and drove 10-year yields above 4.4% from below 4% before the conflict began. Swap markets have shifted from pricing in rate cuts to now showing about an 80% chance of a quarter-point rate increase this year.

Rates volatility has fallen to its lowest levels since April ahead of the Fed meeting.

David DeBiase, a fixed-income portfolio manager at Fidelity, said the market is debating whether it gets "the hawkish Warsh from 10 years ago or this new, dovish Warsh."

DeBiase said bond managers want clarity on Warsh's inflation analysis, including his comments during the confirmation process about the trimmed mean measure and disinflation ideas related to artificial intelligence.