It’s the same story – frustration by a thousand cuts. No real disasters yesterday, but still, lots of red on the screen, as the mood edges ever closer to “extreme fear.”

Fed Day

The odds are extremely high that the Federal Open Market Committee (FOMC) will announce a 25 basis point (bps) rate hike today. The odds skyrocketed after the Consumer Price Index (CPI) number that I thought didn’t make the case for a hike.

I should note that even though firms marked off “hike” on the assessment Bingo card, it doesn’t mean everyone believes such a move is warranted. Goldman Sachs (GS) argues that the overshoot of the 2.0% target is due to one-time factors.

The implication from Goldman is that the Fed is overreacting, and that means they will have to get back to printing money, which is what they all have in common. Greenspan set the tone for the modern Fed Chair, and one has to wonder how long before Warsh must follow.

The market has slipped over the five prior Fed Days and got really walloped at the last meeting, which was Warsh's second turn at bat.

The question now is: will Warsh blink and allow the market to force his hand?

I get the notion that by joining the hiking vote, he pushes back against the bogus notion of a Fed credibility crisis, and it allows him to be more independent next time.

With that in mind, how would Warsh articulate that the deal was for a dovish hike?                     

I’m not sure. There could be real drama today.

Today’s Session

It's Fed Day, and the street is looking for a 25bps rate hike.  It might be better to say that Wall Street is demanding a 25-bps rate hike.

There has been a coordinated effort right out of the gate to smear and mitigate Kevin Warsh's ability to effect change at the Federal Reserve.

Warsh is on record saying he felt the markets have gotten away with bullying past Fed Chairs with their “expectations” games and tantrums.

Add to that the immediate campaign of “Fed Credibility Crisis.”  A made-up ploy to juice those tantrums and turn the public against Warsh.

Here’s what I think is going on. 

Warsh will go along with a hike because the current rules of the road call for one, and it's his chance to prove he’s not in the pocket of President Trump.  But he will work feverishly to change the rules of the road (measuring and attacking inflation) and next year make decisions that go against Wall Street’s business-as-usual comfort zone.

In other words, losing this battle helps him win the war.

The market will take the rate hike as a positive, and the narrative will be that the Warsh Fed is serious about fighting inflation. It should provide a relief rally.

The caveat is making the public believe this is a dovish hike – one of only one or two.

Comments

He will not make a hike in rates. He believes the financial market will take care of itself, just stay out of the way! James G. Williams on 9/16/2026 11:38:41 AM

HOW WE HANDLE THE AI CONTROVERSY IS FAR MORE IMPORTANT THAN A RATE HIKE ! James G. Williams on 9/16/2026 11:40:42 AM

Hi Charles, I noticed President Trump’s Truth Social post yesterday endorsing UNDENIABLE WINDFALLS. That must be a wonderful feeling. Congratulations!!! Gabe Prado Gabe Prado on 9/16/2026 12:40:41 PM

Mr. Payne: What do we need to do to get you a two-hour show slot? The “crew” that is on before you has a two hour show and they spend most of their time talking about things OTHER THAN business, finance, and investing. How about they either move to Fox News Channel, or go to a one-hour slot so you can do two hours? It’s very frustrating to watch you race through your guests to cram everyone in. Imagine what you could do if you had double the amount of time for the same number of guests. Imagine twice as much time for your opening monologue. Please advise. Charlie P. on 9/16/2026 6:18:31 PM

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