NewsMV
August CPI came in hot, and the print lands on Kevin Warsh before a Federal Reserve rate decision he cannot afford to misread.
That leaves Warsh with a specific problem: act on the inflation warnings he has already staked his public reputation to, or absorb a new layer of doubt about his control of the central bank.
The credibility question is now in focus because Warsh has already spoken. In that sequence, a central banker who moves looks prescient, and one who holds draws a harder look from the market.
The consensus trade heading into a rate decision after benign data is straightforward. Warsh's position is that inflation risk is real. The August print, by coming in hot, does not change the argument he made.
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