@macroderek

Fedwatcher @mpamacro

 Washington
Joined October 2015
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Sec Bessent had backed off market-mispricing talking point: "I don't think that I can change the equilibrium interest rate, but what I can do is slow things down." He added today: "But nothing’s ever in equilibrium..." newsmax.com/newsmax-tv/scott… xitter.cf/carney/status/20974170…

Bessent to Newsmax: US Debt 'Scary,' but Economy Remains Strong

The nation's roughly $40 trillion federal debt must be brought under control, Treasury Secretary Scott Bessent acknowledged in an interview with Newsmax, but he insisted that the broader U.S. economy...

newsmax.com
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“I am the house now..." Bessent added, “and you can bet against me if you want.”
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When the US jointly intervened in yen with Japan late July, it sold euro/bought yen. Our analysis suggests the net changes in the US portfolio were modest compared to Bessent's "Buy Japanese Yen (JPY) $5-10 bil."
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Governor Waller speaks in Q&A next Thursday morning, just before pre-September FOMC blackout begins, with @hpschneider at @LSEGplc Whether he dissents to hike (if the FOMC holds) is the key issue at hand, said the event organizer.
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Fed Chair Warsh speech confirmed for next Friday morning:
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We warned clients in early June that Warsh was seeking to lower FOMC meeting frequency to six yearly, but we didn't know when he'd take steps toward it. Now we have confirmation: xitter.cf/colbyLsmith/status/208…
Colby Smith
@colbyLsmithJul 31
Replying to @colbyLsmith
gift link: nytimes.com/2026/07/31/busin… @nytimes

Warsh Considers Reducing Frequency of Fed Policy Meetings (Gift Article)

The Federal Reserve has met at least eight times a year for decades. Reducing the number of meetings would represent the biggest change by Kevin M. Warsh since he became chairman.

nytimes.com
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July FOMC Minutes confirmed our 6(+2) hunch:
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An update: There was no FIMA repo takeup for the week ending Wed. The current $60bn per-nation cap was reached only once before (SNB). Another repo pool, thought to be heavily Japan, did fall, coincident with FX interventions over the period. xitter.cf/NickTimiraos/status/20…
Nick Timiraos
@NickTimiraosAug 4
A little-used Federal Reserve backstop built for the 2020 pandemic dollar shortage is being put to a use it was never designed for: bankrolling Japan’s defense of the yen. Treasury Secretary Scott Bessent, who has lamented Fed mission creep, wants the backstop made bigger.
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Bessent, Tuesday: "I have great confidence in Fed Chair Warsh that he will effectively balance the dual mandate of employment and inflation. I do believe that we are seeing, in terms of headline inflation, temporary headline inflation...
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..., this generated mostly by the energy shock and the history of supply-side shocks would tell you that they will work their way through the system. What we are seeing is this core inflation remains quite under control."
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You say it best when you say nothing at all
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On price stability Warsh answered "PCE infl...that's our number we're sticking with it... Who knows, come after next January, what we might say about strategy, I suspect the task forces might have something to add!" Such comments on infl objective are interesting!
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No hike:
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Chairman Warsh will hold a press conference after next week's FOMC meeting, says the Fed calendar (for now):
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We told clients Warsh believed: Supply shocks:Inflation::Weather:Climate Supply shocks, wars/pandemics/supply chains, can change prices but that is NOT what inflation is. Inflation is the change in prices that begets other change in prices: he has to see 2nd round effects.
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Fed Governor Waller will speak in New York on Monday at lunchtime: nyabe.org/content.aspx?page_…
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The first FOMC minutes under the leadership of new Fed Chair Warsh were shorter, but not strikingly so:
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Vernacular mogged? In the world of central bank cred maxxing, Warsh brutally re-framed the forward guidance in the FOMC vernacular is so they won't be caught punting and spiking their cortisol levels.
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Warsh's concern "speaks to a general concern, especially among Republicans ... (that) too much of the discretion over financial liquidity sits at the Fed instead of at Treasury or in other places where people are directly elected." @macroderek @Reuters reuters.com/business/finance…

As chair, Warsh finally has a chance to put stamp on Fed balance sheet

In the run-up to becoming leader of the Federal Reserve, Kevin Warsh flagged as a cornerstone issue his belief that the central bank's bond holdings must be reduced.

reuters.com
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"In a world where [the Fed is] not using forward guidance, they would be left with simply hiking [rates] as the only way they could signal their commitment to fighting inflation," says @macroderek. This and more thoughts ahead of this afternoon's presser in @vtg2's latest.
Victoria Guida@vtg2Jun 17
Federal Reserve Chair Kevin Warsh will speak publicly for the first time today in his new role as leader of the world’s top central bank. What should we ask him at his inaugural press conference? politico.com/news/2026/06/17…

Trump is demanding rate cuts. Kevin Warsh’s first challenge may be saying no.

politico.com
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