Bloomberg Surveillance · Friday, September 11, 2026
Despite recent hawkish remarks from Fed Chair Warsh, inflation data, particularly core CPI, has come in relatively calm, putting the Fed in a difficult position regarding future interest rate hikes. Tani Fukui from MetLife Investment Management suggests Warsh may not fully grasp the impact of his words and needs to clarify scenarios for holding or hiking rates.
“We haven't seen the details yet, or I haven't seen the details, I should say. But the problem here is that he gave such a hawkish speech at Jackson Hole that, you know— If we didn't know that he constantly says this is not forward guidance, this is not. If Powell, for example, had given that speech, the markets would have been like, okay, cool. We're on a hiking cycle, we're going to be hiking in September, blah, blah, blah. We would march on, right? Yields would probably come down because we would say inflation is under control. Like long-end yields would come down because inflation is under control. The problem with Warsh is he wants to have that. He wanted to actually have that optionality. And he wasn't able to really necessarily articulate what does he do in a situation where inflation comes in relatively calmly. 0.2% is a pretty good inflation number. It's been this or lower, roughly, for the last three months. It's been actually 0.2 or lower for most of 2026. So why hike now? It's a question and not something that Warsh has really been able to, has really discussed.”
“Yeah, what Warsh needs to do is more specifically understand his, I think he doesn't understand the power of his own words. He needs to, if he wants to have optionality provide a much more fulsome picture of which scenarios could lead to a hold, which scenarios could lead to a hike. What is he really looking at? Last time in Jackson Hole, he's focused a lot on hike and not enough on hold and timing.”