Everything We Learned about the New Fed This Week
Today's Post - https://bahnsen.co/4wwsHI5
David Bahnsen reviews this week’s Fed meeting, noting some credible forecasts expected a surprise 25–50 bp hike, though the Fed ultimately held. He argues the Fed’s rationale was unusually direct: financial conditions tightened without a hike as yields rose across the curve, and further tightening should prioritize stopping balance-sheet expansion after $200–$250B of added assets this year. Bahnsen contrasts camps calling for hikes because inflation has stayed above 2% with those citing falling TIPS-implied inflation expectations near 2%, while emphasizing Warsh’s market-focused approach and opposition to investors “gaming” Fed guidance (“play the ball, not the referee”). Warsh rejects a Phillips-curve tradeoff, saying price stability and full employment are not in conflict and inflation harms labor markets. Bahnsen expects falling hike odds and is skeptical rates rise this year, viewing Warsh as reform-minded but incremental, independent from President Trump despite citing tariffs and oil-driven supply shocks.
00:00 Welcome and Setup
00:36 Why This Fed Meeting
03:36 Case for Rate Hike
05:12 Fed Transparency Shift
08:22 Markets Tightened Already
10:21 Balance Sheet First
14:11 Warsh Philosophy Shift
16:50 Hike Odds and Outlook
17:55 Independence and Politics
20:47 Closing Takeaways
22:44 Sign Off and Weekend
Links mentioned in this episode:
DividendCafe.com
TheBahnsenGroup.com
David Bahnsen reviews this week’s Fed meeting, noting some credible forecasts expected a surprise 25–50 bp hike, though the Fed ultimately held. He argues the Fed’s rationale was unusually direct: financial conditions tightened without a hike as yields rose across the curve, and further tightening should prioritize stopping balance-sheet expansion after $200–$250B of added assets this year. Bahnsen contrasts camps calling for hikes because inflation has stayed above 2% with those citing falling TIPS-implied inflation expectations near 2%, while emphasizing Warsh’s market-focused approach and opposition to investors “gaming” Fed guidance (“play the ball, not the referee”). Warsh rejects a Phillips-curve tradeoff, saying price stability and full employment are not in conflict and inflation harms labor markets. Bahnsen expects falling hike odds and is skeptical rates rise this year, viewing Warsh as reform-minded but incremental, independent from President Trump despite citing tariffs and oil-driven supply shocks.
00:00 Welcome and Setup
00:36 Why This Fed Meeting
03:36 Case for Rate Hike
05:12 Fed Transparency Shift
08:22 Markets Tightened Already
10:21 Balance Sheet First
14:11 Warsh Philosophy Shift
16:50 Hike Odds and Outlook
17:55 Independence and Politics
20:47 Closing Takeaways
22:44 Sign Off and Weekend
Links mentioned in this episode:
DividendCafe.com
TheBahnsenGroup.com
Loading content...
Read the full transcript
Matterfact has every podcast on Apple Podcasts and Spotify: 700K+ channels, 120M+ episodes.
The candid version is on a podcast,
not the earnings call.
Matterfact turns the conversations your coverage is already having into a searchable, citable record — across every episode, not just this one.