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Kevin Warsh indicates he will be serious on inflation; no easy monetary policy
Posted on 6/17/26 at 5:46 pm
Posted on 6/17/26 at 5:46 pm
I think Warsh is going to be the right man for the job, but I’m not particularly sure Trump will be too happy with his first Fed meeting and press conference.
Warsh has indicated price stability and a commitment to get inflation to 2% is his priority, but markets were anticipating a more dovish stance from Warsh. Rates rose all across the yield curve, with current futures pricing in an 85% likelihood of at least 1 rate increase this year and 60% chance of at least 2 hikes in the next 9 months. Of particular interest was the 2y bond yield increasing 15 basis points on the day.
I appreciate Warsh’s no nonsense attitude, and he announced 5 task forces to study various components of the Fed. The Fed statement was slashed in half as far as word count goes, and Warsh did not submit his individual dot plot projections.
All in all, I thought it was a nice showing from Warsh, even though markets were not thrilled. If Trump wanted someone who was going to lower rates soon, there was zero indication today. It will be interesting to see if Trump comments soon.
CNBC Article
Warsh has indicated price stability and a commitment to get inflation to 2% is his priority, but markets were anticipating a more dovish stance from Warsh. Rates rose all across the yield curve, with current futures pricing in an 85% likelihood of at least 1 rate increase this year and 60% chance of at least 2 hikes in the next 9 months. Of particular interest was the 2y bond yield increasing 15 basis points on the day.
I appreciate Warsh’s no nonsense attitude, and he announced 5 task forces to study various components of the Fed. The Fed statement was slashed in half as far as word count goes, and Warsh did not submit his individual dot plot projections.
All in all, I thought it was a nice showing from Warsh, even though markets were not thrilled. If Trump wanted someone who was going to lower rates soon, there was zero indication today. It will be interesting to see if Trump comments soon.
CNBC Article
quote:
“I did not submit a dot for me,” Warsh said. “It’s not helpful in the conduct of policy. I suspect by year-end, as I mentioned in my opening statements, there’ll be a review about communication broadly, press conferences, dots, meetings, and the like, transcripts, minutes. This will be part of that. I don’t want to prejudge the outcomes there, but I’m pretty open-minded about what they could be.”
quote:
“It’s a bit shorter, a bit simpler and it dispenses with some older language,” he said. “That statement just gives you the facts, as best we can judge it.”
“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong,” the statement read. “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”
“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability,” the policymakers said.
3
Posted on 6/17/26 at 6:09 pm to slackster
There’s only so much he can do if the congress doesn’t cut spending which they won’t.
Posted on 6/17/26 at 6:11 pm to Sweep Da Leg
Well he’s not going to let Trump and Congress off the hook either. Not a whole lot her can do about long term rates but the idea of refinancing maturing debt at lower short term rates may have left the building today.
Posted on 6/17/26 at 6:13 pm to slackster
Its great to hear a Fed Chair not wanting to rely on old ways of getting data
Cant wait for the cuts and the tears about it
Cant wait for the cuts and the tears about it
Posted on 6/17/26 at 6:16 pm to SDVTiger
quote:
Cant wait for the cuts and the tears about it
Cope harder.
Posted on 6/17/26 at 6:17 pm to SDVTiger
quote:
Cant wait for the cuts
Posted on 6/17/26 at 6:17 pm to SDVTiger
Not happening. But if you’re so confident you can make a fortune on prediction markets!
Posted on 6/17/26 at 6:21 pm to slackster
quote:Yes and no.
Kevin Warsh indicates he will be serious on inflation; no easy monetary policy
His statement about "the number left of the decimal point being more important," was contradictory.
ETA: Given the DVs, perhaps I assumed too much in an abbreviated response. Warsh intimating that the number "left of the decimal" would be the point of focus means the Fed would be open to flexibility in rates between 2.00 - 2.99.
This post was edited on 6/17/26 at 6:44 pm
Posted on 6/17/26 at 6:24 pm to SDVTiger
quote:
Its great to hear a Fed Chair not wanting to rely on old ways of getting data
Cant wait for the cuts and the tears about it
It sounds like he will be raising rates, not cutting.
Posted on 6/17/26 at 6:25 pm to SlowFlowPro
Imaging being a moron who wants rate hikes now 
Once he starts citinf truflation this place is gonna implode
Once he starts citinf truflation this place is gonna implode
quote:
Yes, Federal Reserve Chair Kevin Warsh has strongly indicated that he wants to use new methods and real-time data to measure inflation. He has criticized existing government statistics for relying on "old-fashioned survey methods" and has called for shifting the Fed’s focus away from traditional metrics toward "trimmed averages" that exclude volatile outliers. [1, 2, 3, 4]
Warsh detailed these intentions during his Senate confirmation hearing and at his debut FOMC press conference: [1, 2]
Real-Time Data Alternatives: Warsh stated he wants to move away from relying on lagging government reports that are subject to frequent revisions. He has proposed incorporating private-sector data, suggesting the Fed could "survey a billion prices" to get a more accurate, real-time read on inflation. [1, 3, 4]
Trimmed Average Metrics: He favors "trimmed average" or "trimmed-mean" measures. Rather than using the standard core PCE (which just strips out food and energy), Warsh wants to filter out all "tail-risks" and one-off price shocks (such as supply chain disruptions or localized price spikes) to find the underlying inflation rate. [1, 2]
New Task Forces: Following his interest-rate decision in June, Warsh announced the creation of new task forces, including a specific statistics panel designed to develop and implement these new analytical methods. [1, 2]
This post was edited on 6/17/26 at 6:30 pm
Posted on 6/17/26 at 6:26 pm to slackster
quote:
Cope harder.
Cope about what?
Ypur tears will be so delicious
Posted on 6/17/26 at 6:32 pm to Sweep Da Leg
quote:
There’s only so much he can do if the congress doesn’t cut spending which they won’t.
America has always been a lucky country, and I believe that luck is going to hold this time. I’m becoming more convinced that the AI driven productivity growth is going to be yuge.
Our political class is getting an inflation scare over the last few years, and an understanding is forming that we can no longer be pollyannish about deficits and debt.
As the AI productivity boom occurs (and I think it has already started) all those yo-yos have to do is hold government spending to moderate growth, and the deficit will come down. Even more, the debt and deficit will come down as a percentage of GDP.
If this happens, and I think it will, we will be out of this mess. At least until they frick it up again in ten years.
Posted on 6/17/26 at 6:37 pm to SDVTiger
quote:How about a bet that the Fed's first rate change under Warsh will be an interest rate increase, not a cut. Bet?
Cant wait for the cuts and the tears about it
Posted on 6/17/26 at 6:57 pm to LSURussian
Lets bet. You never ever post on this site again
Posted on 6/17/26 at 7:00 pm to Sweep Da Leg
quote:
There’s only so much he can do if the congress doesn’t cut spending which they won’t.
Bingo. Those frickwads on those sides of the aisle have never seen a dollar they couldn’t spend on something or another.
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