Warsh

Federal Reser

2026-09-25 12:43:08

Fed Chair Warsh rejects the neutral-rate framework as his policy approach takes shape

Odaily, citing Substack, reported that Federal Reserve Chair Warsh has been measuring his tenure in days, and by day 127 the outline of his institutional overhaul had already come into view. The report said he moved quickly to reshape the post-FOMC press conference format, sharply cutting its duration and reordering the seating for reporters’ questions based on the alphabetical order of news organizations’ English names. Beyond those procedural changes, the article pointed to a sharper break in policy thinking and communication style. At a Sept. 16 press conference, Warsh explicitly rejected the traditional neutral-rate framework, saying the concept was useful only in academic settings and offered no guidance for the Fed’s rate-hike decisions. The report characterized the shift as a clear departure from past Fed leadership, with a policy logic likened to Alan Greenspan’s approach.

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Bessent

2026-09-21 12:40:05

Bessent says both he and Trump have full confidence in Fed Chair Warsh

U.S. Treasury Secretary Bessent said he has full confidence in Federal Reserve Chair Warsh and believes Warsh will make the right decisions for the Fed’s mandate. Bessent added that President Donald Trump also has confidence in Warsh. He also said core inflation has not risen and that none of the indicators have changed. According to his remarks, officials will keep watching whether any supply shock emerges on the energy side. The comments, cited by Odaily and attributed to Jin10, focused on confidence in Warsh’s policy judgment and on Bessent’s view that current inflation readings and related indicators remain stable for now.

370

Federal Reser

2026-09-21 06:33:07

Morgan Stanley raises a key question for Warsh: how will the Fed deliver price stability?

The Federal Reserve raised rates by 25 basis points last week, its first increase in three years, but Morgan Stanley argues the bigger issue is not the move itself. In a new note, chief global economist Seth Carpenter said the real significance lies in why the hike happened and what it says about the path of inflation from here. The bank said inflation has continued to cool, but not quickly enough for the Federal Open Market Committee, while a renewed rise in energy prices added pressure to act. Morgan Stanley described the decision as a policy recalibration meant to preserve the disinflation process rather than the start of a fresh tightening cycle. The note also highlighted a tension in Chair Warsh’s framework: he has argued that the Fed’s balance sheet, not rates, is the main driver of above-target inflation, yet he did not mention the balance sheet at his September press conference. That leaves what Morgan Stanley called the key question — how Warsh intends to achieve price stability. The bank said that if balance-sheet reform is eventually put in place, the need for aggressive rate hikes could fall sharply, leaving the ultimate degree of tightening near the low end of market expectations.

360

Morgan Stanle

2026-09-21 06:31:00

Morgan Stanley raises a key question for Warsh: if balance-sheet reform lands, rate hikes may stop short of market pricing

Morgan Stanley said the Federal Reserve’s 25-basis-point rate increase last week should be read less as the start of a fresh tightening cycle and more as a policy recalibration meant to keep disinflation on track. In a note by chief global economist Seth Carpenter, the bank argued that the real issue is not the hike itself, but why it happened and what it says about the path ahead for inflation and policy. The report said inflation has continued to cool, but not quickly enough for the Federal Open Market Committee, while a renewed rise in energy prices added pressure through supply disruptions and the return of risk premia. Morgan Stanley also stressed that Chair Warsh has long framed the Fed’s balance sheet, rather than the policy rate alone, as the core driver behind above-target inflation. That leaves what the bank called the central question: how Warsh plans to restore price stability. Morgan Stanley said markets may be pricing in more hikes than this Fed will ultimately deliver. If Warsh’s working group completes its balance-sheet reform plan and that framework is put in place, the need for aggressive rate increases could fall sharply, with the eventual degree of tightening likely ending up near the low end of current market expectations.

380

Federal Reser

2026-09-18 00:53:52

Nick Timiraos says another Fed rate hike in October could put Warsh back under Trump scrutiny

Nick Timiraos wrote that Donald Trump, despite repeatedly attacking the Federal Reserve for keeping interest rates too high, said he had signaled approval of this week’s rate decision during a call with Federal Reserve Chair Warsh a few days before the move. According to people familiar with the matter, the conversation between Trump and Warsh came as a surprise to many of the president’s close advisers. Timiraos said the temporary truce suggested Warsh had, for now, eased tensions that had previously defined the White House’s view of the Fed as an adversary. That calm may not last long. A senior government official said that if the Federal Reserve raises rates again in October, on the eve of the midterm elections, Warsh could find himself facing tougher scrutiny from Trump and his advisers.

370

Kevin Hassett

2026-09-15 12:17:42

Hassett Says Trump Will Respect Whatever Decision Warsh Makes as Markets Price in 25 bps Fed Hike

White House National Economic Council Director Kevin Hassett said on Sept. 15 that Donald Trump, along with Hassett himself, would respect whatever decision Federal Reserve Chair Warsh makes tomorrow. Market pricing currently points strongly toward a rate increase. Data from prediction market predict.fun shows an 88% probability that the Fed will raise rates by 25 basis points at tomorrow’s decision, versus a 12% chance of no change. Conventional market pricing is slightly more hawkish. CME FedWatch shows a 92.5% probability that the Fed will raise the federal funds target range by 25 basis points at its Sept. 16 meeting, moving it from 3.50%-3.75% to 3.75%-4.00%. The probability of holding rates unchanged stands at 7.5%, while the probability of a rate cut is 0%. The remarks and market odds came ahead of the expected policy decision.

770

Bessent

2026-09-14 11:32:13

Bessent’s bond-market warning may give Warsh more room ahead of this week’s FOMC decision

U.S. Treasury Secretary Bessent said that 「more governments have been overturned by the bond market than by grenades」, a warning that the report said could offer Federal Reserve Chair Warsh support as he faces policy pressure this week. Markets expect the Fed to raise rates at the September Federal Open Market Committee meeting that concludes this week, while the Trump administration has been pushing for easier financial conditions. At the same time, stronger-than-expected U.S. jobs data and inflation still running above the Fed’s 2% target are keeping pressure on the central bank to stay restrictive. Bessent had also said Trump understands the power of the bond market and believes Warsh will 「optimize the policy path」 based on inflation and economic growth. The article said White House attention to bond-market influence could give Warsh more room to maneuver, while also serving as a warning against putting excessive pressure on the Fed. Wall Street also warned that if the Fed keeps waiting while inflation stays elevated and energy prices deliver another shock, the bond market could force action by pushing up long-term Treasury yields.

760

Federal Reser

2026-09-14 07:05:56

Jefferies expects a Fed rate hike this week and says Warsh comments will be pivotal

Jefferies Global Economist Mohit Kumar said in a report that the firm expects the U.S. Federal Reserve to raise interest rates this week, while putting special focus on comments from Warsh about the direction of future policy. Kumar said the hike itself is expected, but the market’s attention should center on what Warsh says next. On the broader path for rates, Jefferies does not expect the Fed to match the 3.5 additional hikes priced in by the forward market. Kumar said an initial hike may be needed for credibility reasons, but any moves after that would depend on how long the war lasts and where oil prices go. The update was cited by Odaily and attributed to Jin10.

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