London | Brisbane. 14 September 2026.
Last week was huge for markets with oil spiking as the Iran saga worsens, bond yields rising everywhere but in China, US CPI & PPI slightly hotter than expected, and US Treasury buy-backs exacerbating the deteriorating fiscal backdrop.
But we are now in the eye of the storm, as investors brace themselves for policy meetings this week of the FED, Bank of England and Bank of Japan.
Mr Warsh’s FOMC meetings just keep getting harder and now his back is to the wall. Markets are telling him he has to hike and the FED always does what the markets tell it to do. And Mr Trump will be blowing a gasket when his boy disobeys him.
His very slim escape path could be that markets have tightened on his behalf already, so there is no need to hike short term rates. It’s true but this would be seen as yet more can kicking. What difference can 25bps make to anything? Nothing.
In his own words, the new transparent and credible FED would surely embark on a hiking cycle to drive inflation to the 2% goal that Mr Warsh talks about continuously. At least 4 hikes of 25 bps or, stop messing around, do it all now if it’s needed.
All kudos to Mr Warsh so far for managing to keep a low profile but that’s changed. He needs to back up the Treasury and move the US forward positively. If it’s even possible.
Another problem will be the Bank of Japan hiking on Friday.
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