Fed Faces Critical Inflation Debate as Warsh Chairs First FOMC Meeting
By
Claudia Sahm
8h ago· 10 min readenInsight
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Golden Brown
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Pure flour-power. Hearty enough to carry you through lunch.
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Summary
The article discusses the upcoming FOMC meeting chaired by Kevin Warsh, focusing on the critical debate around whether the Federal Reserve should raise interest rates given that PCE inflation is on track to exceed 4% in May. The author expresses concern that Warsh's efforts to limit forward guidance could obscure a necessary hawkish shift, potentially surprising markets and increasing borrowing costs. The piece argues that inflation, not the labor market, should be the Fed's primary concern.
Key quotes
· 5 pulledAll eyes will be on Kevin Warsh this week as he chairs his first FOMC meeting.
The debate around the FOMC table will be critical, and I worry that Warsh's efforts to rein in forward guidance could bury it.
Obscure a hawkish shift now, and markets get an unwelcome surprise if the Fed actually moves.
The uncertainty itself could add to borrowing costs.
Inflation, not the labor market...
Warsh says he wants one, inflation demands it, and the dot plot is how we'd see it.
