Unhedged News alert: Fed acts normal
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Sep 17, 2026 The Federal Reserve delivers a conventional quarter-point rate hike as inflation stays stubbornly above target. The discussion explores the Fed’s independence, rising Treasury yields, presidential pressure on monetary policy, and why bond markets may remain tense. Plus, long positions on endangered potatoes and Russian oligarchs financing extravagant weddings.
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The Fed Delivered A Hawkish Unanimous Hike
- The Fed unanimously raised rates 0.25 percentage points and signaled further tightening through its dot plot.
- Members judged inflation too high while employment and economic growth remained strong enough to tolerate higher rates.
Warsh Painted Himself Into A Rate Hike
- Central banks avoid surprising markets with rate increases because abrupt tightening can destabilize expectations.
- Robert Armstrong argues Kevin Warsh’s hawkish Jackson Hole remarks effectively made retreat impossible after the latest inflation reading.
Why PCE Matters More Than CPI
- CPI and PCE use overlapping data but weight spending differently, producing materially different inflation readings.
- PCE is the Fed’s target measure, and its rate above 3% remains far from the 2% objective.