Kevin Warsh has taken over as Federal Reserve chair with a strategy few of his predecessors would recognize – saying almost nothing about where interest rates areKevin Warsh has taken over as Federal Reserve chair with a strategy few of his predecessors would recognize – saying almost nothing about where interest rates are
New Fed chair's silence is speaking louder than he realizes: report
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Kevin Warsh has taken over as Federal Reserve chair with a strategy few of his predecessors would recognize – saying almost nothing about where interest rates are headed.
But that silence has instead opened the door for his colleagues to fill the void, and their message is increasingly hawkish, reported Politico.
In the past week alone, nearly a third of Fed officials have publicly weighed in on the path of policy, while Warsh himself has offered little more than a defense of his own reticence. At his first press conference, he barely touched on the labor market, one of the central bank's core rate-setting metrics, and he argued that forward guidance can make policymakers "prisoners of their own words" by creating confusion rather than clarity.
But that reasoning hasn't stopped his colleagues from talking. Cleveland Fed President Beth Hammack has flagged persistently high inflation as a reason rates may need to rise. Minneapolis Fed President Neel Kashkari has shifted his own outlook from penciling in a rate cut to now expecting a hike by year's end. Fed governor Christopher Waller, an appointee from Trump's first term whose remarks markets track closely, has said he can no longer rule out further hikes.
The result, economists say, is that Warsh is ceding the narrative rather than controlling it. As Renaissance Macro's Neil Dutta put it, the chair's traditional role is to forge consensus and cut through the "cacophony" of competing voices. Without that, "you're kind of just outsourcing policy to the median swing voter."
Warsh insists markets are handling the change just fine, pointing to falling volatility and falling inflation expectations as evidence his approach is working.
But several market strategists say that confidence may be premature, predicting the current near-total silence is unsustainable over the long run and will require a slow recalibration as investors adjust to operating with far less institutional guidance than they've grown accustomed to over the past quarter-century.
“It’s going to take a while for the market to get used to [this dynamic]," said Scott Wren, senior global market strategist for Wells Fargo Investment Institute. “I view this as a multi-year period transition.”
There was more bad news for Donald Trump on Thursday morning as the new jobs report revealed dismal growth, leading MS NOW’s Stephanie Ruhle to raise a new red flag for the president’s embattled administration.
Appearing on “Morning Joe,“ Ruhle, a former Wall Street executive, noted that only 57,000 new jobs were created — a far cry from the 115,000 expected by economists.
Speaking with host Jonathan Lemire, who warned, “We've seen downward revisions for the last two months,” Ruhle first explained that Trump should not expect a rate decrease from the Fed as the job market remains stagnant.
She later elaborated, “People cannot afford to get their lives started; they cannot afford the basic things they need to work to get to work, a place to live, a decent job that's an issue —we're talking about a jobs number that's almost half of what we expected.”
“So when the president is posting about 401K’s, people who can't get a job don't have a 401K, don’t have anything to feel good about,” she pointed out.
"Remember it was [former Fed chair] Alan Greenspan, I think, who said 2006, who said income inequality is going to be the biggest issue,” she continued. “We're watching it play out day in and day out, and it's startling that when the President is faced with it, he keeps saying things like affordability is an old-fashioned term and nobody cares. He doesn't care because he's on his way to the moon when it comes to how successful and how wealthy he has become.”
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House Democrats are alleging "massive Trump fraud" in a new probe that accuses the White House of staging a "hostile takeover" of America's 250th birthday celebration, according to one journalist.
In a Thursday broadcast, investigative journalist Scott MacFarlane interviewed House Natural Resources Committee Ranking Member Rep. Jared Huffman (D-CA), who released an interim report titled "From Vanity to Insanity: How the White House Cheated the American People Out of Their 250th Birthday."
"If I had to use one word, it would be corruption and deception," Huffman said.
The report accuses the White House of first trying to bend America250 — the nonpartisan birthday commission Congress created in 2016 — to its purposes, then creating Freedom 250 LLC, a limited liability company MacFarlane called "a shadow organization," to infiltrate the celebrations with what the report calls President Donald Trump's "extreme partisan agenda."
"They tried to stack it. They tried to strong-arm it," Huffman said. "America250 was promised $100 million from Congress; that amount was reduced down to less than $25 million by what they did. It was a shell game."
The report alleges that donors who thought they were giving to America250 were instead given Freedom 250's banking information, routing their money to Trump's substitute organization without their knowledge.
"The donors may well have been defrauded in a way that could constitute wire fraud," Huffman explained.
Wire fraud is a federal crime involving the use of electronic communications to carry out a deceptive scheme for financial gain.
MacFarlane noted that at least one canceled musical act described the concert booking as a "bait and switch" — they thought they were signing up for a nonpartisan event.
"He tried to make this 250th about himself, and I think he failed miserably," Rep. James Walkinshaw (D-VA) insisted.
Senate Democrats had already launched a separate probe into Freedom 250's funding in February, led by Sen. Adam Schiff (D-CA), who accused the organization of running a "pay-to-play" scheme selling access to Trump.
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If President Donald Trump was hoping for a good jobs report to boost his party's spirits, he didn't get it.
As the latest survey results came in, economic reporters and other observers were quick to note that, while not every figure in the report was bad, it was well below what Wall Street had been hoping for.
"A disappointing jobs report," wrote Navy Federal Credit Union chief economist Heather Long on X. "The US economy added 57,000 jobs in June (below expectations of 115k). Hospitality jobs decline by -61k. Plus, April and May were revised lower by -74,000. The unemployment rate fell to 4.2% --> the lowest in a year, but mainly due to a big drop in people job hunting." Also rough, she noted, is that "Wages aren’t keeping up with inflation," only rising 3.5 percent vs 4 percent price increases.
As the far-right financial site Zero Hedge put more bluntly, "The jobs print was below all but one forecasts."
Wall Street Journal chief economic correspondent Nick Timiraos wrote, "The U.S. economy added 57,000 jobs in June and revisions subtracted a combined 74,000 jobs from the previously reported figures for May and April. The unemployment rate edged down to 4.2%. Leisure and hospitality employment declined by 61,000 in June."
Industry analyst account The Kobeissi Letter noted that "The unemployment rate fell to 4.2%, below expectations of 4.3%," but that "May's jobs number was also revised down by -43,000 jobs. The labor market remains in a volatile situation."
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