Kevin Warsh held rates at 3.75% to 4%. The vote was 10-2. Nobody was surprised, which is the only thing the Fed has ever been good at.
Here is the real news. Starting in 2027, one of the eight FOMC meetings will have no rate vote. No statement either. In 2028, two meetings get the same treatment.
The Fed built a meeting where nothing happens and gave it a name. They call it "strategy." You call it Tuesday.
Think about the confidence required. Warsh stood at a podium and announced fewer chances to be wrong. Six rate decisions a year. Down from eight. That is not reform. That is a man reducing his exposure to your opinions.
Lisa Cook and Beth Hammack dissented. They wanted a quarter-point hike. Two officials looked at an economy and said, more pain, please. They are the only two people in Washington who understand your portfolio.
Warsh also said politics played "no role" in the decision. The midterms are six days away. He volunteered this. Nobody asked a man with a clean conscience to say that out loud, but he said it anyway, like a guy at a dinner party announcing he has not been stealing silverware.
He also declined forward guidance. Again. He said that if he had a firm conclusion, he would announce it with fanfare. So the Fed has no plan, and it told you so on live television. Somewhere a retail trader bought calls on that.
I look at a chart. The chart does not hold press conferences. The chart does not cancel its own meetings. The chart has never once said "strategy."
Five takeaways, they say. Mine is one. Your 2028 rate cut thesis now has two fewer meetings to disappoint you.
Photo by Cesar Done on Unsplash
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