Unlike Warsh’s July disaster, he was prepared for press questions today.
The median expectation for 2026 in June was 3.8 percent.
The Summary of Economic Projections shows the median forecast is now 4.1 percent for 2026 and 2027.
Warsh does not believe in forward guidance and did not vote.
PCE Inflation Forecast
The Inflation forecast explains the change in the monetary policy forecast.
Prepared Speech Comments
- “An attitude of optimism is what I heard inside the FOMC these past few days. Unemployment claims are a at a level consistent with full employment. The labor side of the Congressional mandate is in good shape.”
- “Yet, for more than 5 years, Inflation has been running above target. So our predominate focus is on the price stability side of our mandate.”
- “The plain fact is inflation is too high, and has been for too long. Too many categories are still posting increases above three percent posting on both a 6-month and 12-month basis.”
An Excellent Press Conference
Here’s a video link to the prepared comments and the following Fed Press Conference.
Unlike his big gaffe in July when Warsh stated the market was doing Fed hikes, he made no serious blunders in September.
Asked several times about Trump, the only comment Warsh made was “Independence is a two-way street.” That was perfect.
What’s Driving Treasury Yields
- Strengthening Economy
- Competition for capital – AI
- Geopolitics and Oil Crack Spreads
When asked why treasury yields are up since June, Warsh stated a strengthening economy, competition for capital, and geopolitics including the war in Iran.
Warsh fell into no traps, and he avoided any semblance of forward guidance.
Amusing Sarcasm
As noted earlier today, The Fed Hikes Base Interest Rate a Quarter Point 12-0 Decision
There were no surprises and it was silly to expect them.
I agree. Well done, especially as compared to past fed pressers.
Imo.
I dont know do they need to. Maybe you cant lower it later if they dont raise it now. Seems trump is gonna ride this war out at least to the midterms. Then if the dems win he has someone to blame the Loss on he can cut run. If the republicans somehow ( cheat ) manage to hold on the war will keep on until who knows.
When i was a kid my older siblings would beat on me. My sister would grab my short neck hairs while my older brother would twist my arm etc. while hitting me. I found it hurts less to just take it than to squirm against the pulled hair and twisted arm. Trumps in the same boat. Anything he does will make the pain worse. At some point something will change he will claim victory.
The pipeline attack led to the Saudis have to cut shipments to Europe. Last i heard the sr is running out. Ukraine not gonna stop hitting Russian refineries. (I dont blame them). Oh yeah mt oil is about to be the new tp. five qt of castrol at wm is up 6 bucks.
Seems were getting to the point where things are gonna get ugly. Asias exports gonna shut down. Food gonna start to go through the roof. Etc etc.
most nations have pretty much trying to stay out of it. But at some point when the economy collapses people can buy food. Any country with a military will has to start funneling oil to their military and choose a side. Some good ole end of days four horseman etc etc.
thats where were slowly heading. Even if peace tomorrow. Its gonna be a long time before things get rolling again. I mean at some pt the oil co s got to put the oil back in the sr. That will keep gas high long after infrastructure gets fixed.
Im no prepper but i went ahead and purchased enough motor oil for another change on the vehicles. Order a clutch for my truck 6 mos ahead of when i need so i have the parts. Told the wife we should go ahead and get xmas stuff. At some point we will be seeing cartoons of trump as the grinch. You either are not gonna find what you want or it will be twice the price.
Warsh should reform the Fed as he said he would. Liquidate all non-treasury assets and mark all assets to market. Take the losses if needed and let the demand and supply dictate prices rather than some shadow market that is now $45T.
Many of the non-treasury assets are subject to mark-to-market, but what kind of stress will that mark to market create when the first sale happens?. This is why they are still on the balance sheet, they are toxic sludge.
In your summary you have a quote by Warsh to the effect that inflation is running higher than the 3% baseline (3rd bullet of quotes). I thought the baseline target was 2%. If so, isn’t this a pivot? It suggests that the 10 year should indeed be 5% ish given that it represents a good proxy for GDP growth and inflation consisting of 2% GDP and 3% (give or take) inflation. In fact, one could say that a 10-year above 5% represents normality. Am I missing something here?
Trump picked Warsh because he was “central casting”.
Seems that last tweet wasn’t as sarcastic as the poster probably thought. I can’t wait to see what new idea Trump has squeezed out on the porcelain throne today. Total trading ban with the world? Mandatory bond buying? Free money for everyone- oh wait he did that. I’m starting to run out of dumb ideas that don’t seem to actually be on the mad king’s agenda.
He probably meant Our Country is BOMBING.
“Give Us Another Chance!”
https://www.mediaite.com/media/news/jd-vance-asks-americans-to-give-us-another-chance-in-candid-podcast-moment/
Wow. That is. Pathetic.
To be fair to ol’ JD, I can’t think of any better message for the GOP than “whoops” for these elections. There’s not a single high point to be found, not a single issue voters are warm on (and that includes immigration). “Sorry” is genuinely the only word appropriate for an administration this inept. I didn’t expect much from a second Trump presidency, but this is beyond my wildest dreams in terms of self-defeating.
Well, he could come out an say the Iran War has been a clusterf*ck of epic proportions and that we need to cut off the genocidal ethnosupremacist state of Israel, but that would require honesty and courage he doesn’t have.
Oddly, I think after the midterms and in 2027/28 he can position himself as the centrist candidate. The Democrats will still be lost at sea and promoting policies that can be called out as anti-American citizen. Immigration is going to still be an issue. Many on the right are still angry at immigrants and want most of them deported.