The Warsh Era Begins

Source Summary

Summary The hosts dissect new Fed chairman Kevin Warsh’s first FOMC press conference, in which the Fed held the federal funds rate at 3.75% and Warsh offered a broad, systemic critique of how the Fed has operated, which the hosts find rhetorically remarkable coming from that position even as they expect no meaningful reform because “the institution itself is the problem.” They stress the Fed hasn’t hit its self-invented 2% target once in five years, with CPI at a 38-month high, PPI at a 42-month high, and the dot plot not showing 2% inflation until 2028, and they argue Warsh is boxed in by the regime’s need for low rates, war financing, and dollar reserve status. McMaken bluntly rejects Warsh’s stated goal of increasing the Fed’s credibility, saying he wants the Fed “to go down in flames,” while warning that a “reform-minded” chair could deliver even worse policy under a nicer veneer. Top 5 Key Topics The rate hold and persistent inflation failure: The FOMC unanimously held the federal funds rate at 3.75%, down from a roughly 5.5% peak, with the hosts noting May CPI hit a 38-month high, PPI a 42-month high, and PCE a 20-month high. They emphasize Warsh repeated that the Fed has not hit its made-up 2% target at any point in the last five years, and argue the real target should be closer to zero or negative since a productive economy drives prices down. Warsh’s systemic critique as theater: Bishop calls the press conference a fascinating but largely symbolic “stall tactic,” with “task force” the most ...