Center for Financial Economics

By Jon Faust   There is much to unpack in Kevin Warsh’s choices of people to lead his 5 task forces, but one name on the inflation frameworks task force jumped off the page and warrants much more attention than it seems to be getting. William White, like the CFE’s own Bob Barbera, is a long-time...

Robert J. Barbera Turns out that May’s U.S. trade deficit soared, producing a plunge for estimates of U.S. real GDP growth for 2026:Q2.  If those estimates prove correct, they will raise serious questions about the productivity boom that many have claimed started last year. We have long held that the surging gains for U.S. output...

By Jon Faust.   After sifting through the gleeful bravado and slogans (“inflation is a choice”) of Kevin Warsh’s first press conference, we are left with more questions than answers.  Literally.  He recycled 2 answers repeatedly in response to several questions about policy: to paraphrase, “Sorry, I don’t do forward guidance,” and “I’ve got a task...

By Jon Faust.   Kevin Warsh has made no secret of his desire to remain silent about where monetary policy is headed.  Indeed, this is the main thing about the day-to-day conduct of policy that he has been transparent about.  So those of us interested in the likely course of policy may be left to the...

By Jon Faust On Friday, Kevin Warsh will bring two agendas to the Fed, regime change and lowering interest rates.  To be fair, Trump assigned that second one, and unless the outlook changes materially, the FOMC won’t be lowering interest rates any time soon.  As I argued in my previous post, Warsh will likely go...

by Bob Barbera Consider the chart, directly below. It depicts quarterly readings on consumer sentiment and the equity risk premium. In general, the happier are consumers, the smaller the premium investors get for bearing risk. Conversely, when despair is in the air, stocks are cheap, and accordingly, the risk premium is high. Except for the...