Watch Live: Fed Chair Warsh Explains 'Hawkish' Hold
The short version
- Jonathan Pingle, chief US economist at UBS, said he hadn’t felt this uncertain about an imminent Fed rate decision in 20 years, back when Ben Bernanke became Fed chair.
- However, the three dissents in favor of a rate hike clearly show the direction of travel ,and that may prove helpful to Warsh if he aims to tamp down inflation pressures.
- While yields are down and gold up after the statement, the dissenters would suggest this decision leans hawkish (Goldman expected 2 dissents, so marginally hawkish).
- Warsh will likely emphasize that all options remain open, and that future decisions will depend on the data.
- Desks anticipate a continued emphasis on the inflation side of the dual mandate, without offering any type of commitment for future hikes…
The story
Having delivered the biggest "non-cut" surprise to markets in decades - by holding rates unchanged (markets were pricing a 35% chance of a hike) - and given Warsh’s distaste for forward guidance, he is unlikely to offer any clearer signals during the press conference.
Bear in mind that since 2015, traders have foreseen the Fed’s ultimate rate decision with an average error of 2.4 basis points the day before the central bank’s announcement, according to a note from Ian Lyngen, head of US rates strategy at BMO Capital Markets.
“The market is set up for a sharper kneejerk response to the FOMC announcement than is typically the case,” Lyngen said.
Jonathan Pingle, chief US economist at UBS, said he hadn’t felt this uncertain about an imminent Fed rate decision in 20 years, back when Ben Bernanke became Fed chair.
However, the three dissents in favor of a rate hike clearly show the direction of travel,and that may prove helpful to Warsh if he aims to tamp down inflation pressures.
While yields are down and gold up after the statement, the dissenters would suggest this decision leans hawkish (Goldman expected 2 dissents, so marginally hawkish).
Warsh will likely emphasize that all options remain open, and that future decisions will depend on the data.
Desks anticipate a continued emphasis on the inflation side of the dual mandate, without offering any type of commitment for future hikes, though he might also acknowledge the upside risks to inflation posed by the latest rise in oil prices.
He recently announced the leaders of the five Chairman’s Task Forces for Advancing Monetary Policy and might provide an update on the timeline for their work.
Watch the full press conference live here (due to start at 1430ET):
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How this story developed
Full timelineAlto has tracked this across 3 days of coverage from 1 outlet.
- Watch Live: Fed Chair Warsh Explains 'Hawkish' HoldYou are here
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The Story At A Glance
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- • Fed Chair Kevin Warsh held interest rates steady at 3.50% to 3.75% in a 9 to 3 vote.
- • Three regional presidents dissented in favor of a rate hike to combat persistent inflation.
- • The decision surprised markets that had largely priced in a different outcome.
The Federal Reserve is navigating high inflation pressures exacerbated by rising oil prices and new tariffs. Chair Warsh is utilizing a no guidance approach to maintain flexibility amidst economic uncertainty.
Christian Perspective
Economic instability driven by central bank maneuvering undermines the ability of the traditional family to achieve financial security. Inflation acts as a hidden tax that disproportionately harms the working class and the faithful. True stewardship requires a stable currency that honors the value of labor and hard work.
Implications
Continued volatility threatens the domestic stability required to raise large, virtuous families. High costs of living driven by monetary policy force parents into the workforce and away from the home. Economic chaos serves to weaken the social fabric and the natural patriarchal order.
Broader Trends
The Fed's struggle reflects a larger pattern of globalist institutions failing to manage the nation's resources effectively. This uncertainty often precedes shifts in power that favor international financial interests over the American worker. Such instability is a hallmark of the decaying liberal economic order.
Takeaway
Americans must prioritize financial sovereignty and avoid reliance on debt-driven consumerism. Support policies that favor domestic production and sound money to protect the nation's heritage. Focus on building resilient, self-sufficient households that can withstand central bank volatility.
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