Fed Policy

Summary Month-over-month core PCE came in at +25bps (vs 28bps nowcast) while the year-over-year core PCE reading came in at 3.01% (vs 3.14% nowcast). While headlines noted that today's reading were a downside miss, the month-over-month core PCE reading was

In 2026, the Fed moved from an easing bias to a hold to a hike, catching up to the data with a lag at every stage. We look back at how (1) a bottoms-up read of inflation, (2) a careful reading of the labor market, and (3) close tracking of the full FOMC put us ahead of the hawkish turn.

Kevin Warsh is off to a rocky start just two meetings into his tenure as Fed chair. He has refused to provide a framework for how monetary policy should operate, and he has lost both the hawks and doves on the rest of the Committee. The signal for where rates are going will come from his colleagues.

Kevin Warsh says he wants to "survey a billion prices," yet has embraced a trimmed mean measure (conveniently the most dovish signal) which asymmetrically throws out 55% of the basket and leans on lagging housing components. Symmetric, market-based ex-housing variants show upside inflation risk.

On the eve of the blackout period last week, Federal Reserve Governor Christopher Waller delivered a speech outlining why he believes the Fed should reduce interest rates by 25bps at the July 2025 FOMC meeting. Governor Waller’s arguments were rooted in data and solid macroeconomic analysis, and many of