Odd Lots · Tuesday, September 1, 2026
Adam Posen suggests that Federal Reserve Chair Warsh's speech indicated a 'tight new guise' for policy, but the Fed's delay in hiking rates could lead to a 'messy' situation. He notes that if the Fed doesn't hike, it raises questions about political influence and whether the Chair is acting ahead of the committee's consensus.
“And basically, the next sentence is, therefore, we have a tight new guise. Didn't say the next sentence. So things could get really messy because if they don't hike, then people start saying, was that because of Trump? Was the chair out over his skis, meaning ahead of the committee?”
“If the chair's ahead of the committee, it's better than being behind the committee, but it's still worrisome.”