Bloomberg Podcasts · Warsh Says FOMC Had 'Good Family Fight' on Fed Policy as Rates Stay Steady

1. 1. The FOMC statement was surprisingly dovish, focusing on supply-side inflation factors and a stable labor market, with only one hawkish line reaffirming the 2% inflation target.
2. 2. The dot plot was very hawkish, with 8-9 FOMC members projecting a rate hike as the next move, surprising markets that expected only 3-4.
3. 3. Chair Warsh focused entirely on price stability in his press conference, ignoring the dual mandate and the labor market.
4. 4. Warsh announced four task forces: on communications, the balance sheet, data sources, and productivity/jobs, signaling a shift in Fed operations.
5. 5. Warsh plans to reduce Fed communication, arguing that forward guidance is unnecessary when policy is two-sided and risks handcuffing the Fed.
6. 6. Falling oil prices, down $35 from recent highs, provide a tailwind for Warsh to talk hawkishly without needing to hike immediately.
7. 7. The housing market is weak due to high rates, with depressed homebuilding and sales, but data center construction is filling some of the void.
8. 8. Warsh avoided directly answering whether AI is inflationary or disinflationary, handling the topic delicately to avoid sounding more hawkish.