Kevin Warsh runs the Fed now. The survey says he won't touch rates. The survey also says he'll delete the part of the statement that promised cuts were coming. This is what passes for bold leadership in central banking: erasing a sentence.
The easing bias lived in that statement for months. It told markets the next move was down. Warsh's Fed will remove it this week, according to people who get paid to guess what twelve economists in a room will type into a Word document. The bias served no purpose except to give retail traders something to misinterpret on Reddit. Now it goes away. Rates stay exactly where they are.
Nobody asked for this level of excitement. The Fed spent a year signaling cuts. They meant it. They really did. Then they changed their minds but kept the signal anyway because deleting sentences is apparently harder than controlling the world's reserve currency. Now they'll finally update the document. Traders will spend forty-eight hours analyzing the new language. They will find nothing. There is nothing to find.
This is technical analysis in reverse. Instead of drawing lines on a chart that means nothing, they're erasing lines from a statement that means nothing. The outcome is identical. Your portfolio doesn't care. The Fed doesn't care. Kevin Warsh certainly doesn't care. He's leaving rates alone while the survey respondents congratulate themselves for predicting inaction. What a f*cking skill.
Somewhere right now a guy with $1,200 in a Robinhood account is refreshing the FOMC statement preview page. He thinks the removal of easing bias is a hawkish signal. He thinks hawkish means buy tech calls. He will lose everything by Friday and blame Jerome Powell, who doesn't even work there anymore.
Photo by Markus Spiske on Unsplash
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