Kevin Warsh chairs his first Fed meeting in June. Rates stay unchanged. Your savings account still pays less than a gas station candy bar costs.
The headline promises this leadership change "could mean" something for your money. Could. Not will. Not is likely to. Could. The financial media's favorite word when they have nothing to say but need 800 words to say it. Warsh could hold rates steady. He could also tap dance. Both have the same probability of affecting your portfolio.
Here's what actually happens: Warsh sits in a chair Jerome Powell sat in. The committee votes the same way it would have voted anyway. Bloomberg writes sixteen paragraphs about what this "signals." You read all sixteen. Your checking account balance does not change.
The piece warns this may impact consumer borrowing and savings rates "down the road." Down which road? The one where your high-yield savings account goes from 0.01% to 0.012%? The one where your credit card APR stays at 27% regardless of what any Fed chair does ever? That road?
Retail traders will read this headline and think they've gained actionable intelligence. They'll check rate predictions. They'll google Warsh's speeches. They'll buy rate-sensitive ETFs. The Fed will do exactly what the Fed always does: whatever protects banks first and your borrowing costs never.
Warsh's entire tenure could be summarized before it starts: rates do a thing, reporters explain why that thing means something, your money does what it was going to do anyway. The leadership change means nothing. The rate decision means nothing. The article about the rate decision means less than nothing because you spent time reading it.
You know what really impacts your money? Not reading headlines about what "could" happen at meetings that haven't occurred yet.
Photo by Andrew Dawes on Unsplash
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