The Week in Review: June 22, 2026
There’s a New Sheriff in Town
The Federal Reserve surprised no one by holding its key rate, the fed funds rate, at 3.50–3.75%.
But given the Fed’s full-throated rhetorical assault on inflation under newly installed Kevin Warsh, who took the helm from Jay Powell after his term expired, a surprise rate hike felt plausible. Further, there was a much different “feel” to the Fed under Warsh’s leadership.
For starters, the press release following the minutes tallied just 130 words, less than half the 341 words from the April statement under Powell. It brought back memories of the Greenspan Fed of the 1990s.
It was, as Warsh framed it, “shorter, simpler,” and just the “facts.” And the focus was squarely on inflation. A remark in Warsh’s opening statement that “inflation has been running well ahead of the Fed’s long-stated inflation goal of 2% that’s been going on for more than 5 years” set the tone for the meeting.
Moreover, the phrase “price stability” was uttered 14 times during his press conference, while little was said about employment.
As he seeks to leave his mark on policy and the Fed itself, Warsh is also looking to implement reforms he publicly advocated before taking the Fed’s helm.
Without diving into the policy weeds, he is focused on five key areas and aims to provide further detail by year-end, including how the Fed communicates its policy and actions to the public.
Bottom line—the hawks are circling
The Fed’s forceful tone on inflation is putting a rate hike in play at the July meeting, a major shift from earlier in the year.
While probabilities can change quickly, a closely followed gauge from the CME Group puts the odds of a July rate increase at about 38% as of last Thursday, up from just 8% one week earlier.
Officials largely coalesced around Warsh at his first meeting, but the consensus frays when it comes to the path forward, particularly on how best to engineer a lasting return to price stability.
According to official Fed projections, half of policymakers are taking a wait-and-see attitude on inflation as oil prices slip, while the other half would like to take more concrete steps.
Is Warsh preparing for higher interest rates or simply tough talk out of the gate? If he is looking to tighten policy, he’ll need to foster consensus.
Market summary
Two FOR THE ROAD
“News is a business incentivized to address your interests as a reader and not necessarily your needs as an investor. And your needs and your interests aren’t always in line. In markets news specifically, there’s also a time horizon mismatch between news providers and investors.” - Sam Ro, blogging on March 25
“In most countries, investors today have the miraculous privilege of being able to compound their wealth over long periods without facing the apocalyptic forces that have wreaked havoc throughout history. What a sad irony that so many people are choosing, instead, to act like short-term gamblers.” - Jason Zweig on why almost everyone loses on prediction markets, WSJ May 3 (via subscriber Niles Brancati)
I hope you have a wonderful week!
Warmest Regards,
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
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4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.