Kevin Warsh, the new chairman of the Federal Reserve (Fed), did not feel like acting. He raised the white flag and decided to rely on the market, on bond vigilantes. The concise statement released at the end of the Federal Open Market Committee (FOMC) meeting on July 29 already makes it clear in the first line that the decision was not unanimous: with a vote of 9 to 3, it was chosen to leave interest rates unchanged in the range between 3.50% and 3.75%. Yet, the same statement points out that economic activity "continues to expand at a sustained pace despite high uncertainty, [...]
AUGUST COMMENT 2026 - WARSH ENTRUSTS THE FED AI BOND VIGILANTES