Odds now are over 87 percent for a Fed hike. What will Trump do?
Fed Watchers
Five of six indefinite hold calls switched to hike after the CPI report.
Bianco on Leaks
There will not be a leak.
Will Trump Summon Warsh to the White House?
- Yes
- No, Just Media Pressure
- Nothing
Expect a hike, summons or not. My take is The August CPI Report Seals a September Fed Interest Rate Hike
My position didn’t change as explained on August 31 in Political Realities May Force the Fed to Hike in September
It will be a stretch for the Fed to pause for many reasons, not just the CPI.
Wouldn’t Trump need to bring in the whole committee to brow beat them into voting the way he wants? Just inviting Warsh won’t hack it.
On the other side. This is the media message which is a mouthpiece for financial manipulation. The media wants demoncratics.
Both Warsh and Bessent are hedge fund managers not egg head think tank economists. They communicate all the time. If Warsh is summoned to White House it is just part of a show for the media. This is all pressure from the media to raise rates into an election.
What if Warsh invoked demand destruction and does not want to repeat the 2008 European mistake of raising rates. Traditional economists just look at rates and dont take in the effects that many economies are in trouble and selling their dollar piggy bank(treasuries) to fund oil purchases.
Europe negative GDP
China bailing out major banks and financial institutions.
Oil price increases are net positive since we are an oil exporter.
The media has been threating that the fed may lose credibility over long rates. They never had influence only short term. This plays on the bessent move. Bessent is buying heavily discounted long term debt for 75 cents of face value and replacing with face value treasuries at lower rates and making it easier to borrow treasuries against collateral; greasing liquidity. Bessent is oversuppling the market with bills.
The core CPI was as expected and did not increase. This is just hype. I will take the 13% odds against the media narrative.
What will trump do? Hopefully stroke out.
Kibuki Theater
Trump Lies Again: Says We’ve Taken In $21 Trillion From Tariffs
During an interview with Fox News host Laura Ingram, Trump claimed he probably didn’t need congressional approval to hand out $5,000 checks to Americans as a bribe and lied, saying he’d taken in $21 trillion from tariffs, which would pay for it.
$21 trillion is an awful, awful, awful lot of money.
It is just so CHORAL, all of this nonsense about Hikes or not. Interest rates are a signal, not a mechanism.
I don’t see him getting summoned. I think Trump is too impotent now.
He will attack on social media. He can do that from the toilet
You see Trump picking this guy up and holding him against the wall, and explaining to him that he will not raise interest rates, as LBJ was said to have done to the head of the Fed in his day? I don’t think Trump is quite such a criminal type as LBJ, and the people around him aren’t as pathetic, either: they wouldn’t let Trump get away with it.
Warsh has to be dreading that closed door meeting, and the deployment of the diaperbomb.
If Trump thinks it will do the trick, then that’s what he’ll do.
Whether Trump does or does not summon Warsh is irrelevant. The bond market is, and has always been, in control of interest rates.
Yes
Even a deranged and self-centered, over confident taco has to see his position is becoming eroded by the day (with no one blame but himself). As a result, you can believe taco will place pressure on warsh not to raise interest rates.
I agree. Warsh will cave.