The New Fed Chair Just Tore Up The Playbook On Day One | DiMartino Booth
Summary
Fed Shift: Kevin Warsh scraps forward guidance and signals a tougher stance, with half the committee favoring hikes, driving immediate market repricing.
Gold: A sharp drop on the hawkish pivot is framed as a buying opportunity if higher-for-longer rates catalyze credit stress, reinforcing gold’s safe-haven role in crises.
Private Credit: Elevated risk of a blowup in private credit potentially bleeding into private equity and public markets, with defaults, redemptions, and stale marks as likely triggers.
Treasury Volatility: Yield-curve flattening and reduced Fed handholding point to heightened Treasury market volatility, with implications for issuance and widening bond spreads.
Market Outlook: Less guidance means more surprises; every inflation report now carries greater weight as the Fed resists being boxed in by projections.
Data and Frameworks: New task forces will reassess communications, the balance sheet, data sources, productivity/AI, and inflation frameworks to modernize policy tools.
Credit Stress Signals: Rising bankruptcies, commercial real estate losses, and refinancing strains (e.g., short-term rental mortgages) could intensify under sustained high rates.
Transcript
I wouldn't prejudge what happens in the future, but there was only one big subject for us. We took it on. We had a good family fight on it for a couple of days, and we ended up, I think, in a better place. That's Kevin Walsh, the brand new Fed chair, describing his very first meeting, and he said it warmly. But here's what's behind that good family fight. Even with a unanimous vote today, someone in that room floated a rate cut before they settled on a hold. Now in 90 minutes, Worsh broke clean from the Powell era. He scrapped the signal that rate cuts were coming. He refused to file his own rate forecast. And half of this committee now wants to raise rates this year. And the market verdict was instant. Looking over at gold. I mean, it ran up to about 43.83 this morning, then got cut nearly $150, down more than 2% on the day. Meanwhile, stocks fell. The dollar jumped. So, is this Fed about to raise rates into the most indebted market in history? And stick with me. I'll translate all of it into what it means for your money. But first, someone who's actually sat inside that building. Joining me now is Fed insider Danielle D. Martino Boo, CEO of Qi Research, author of the Daily Feather. Uh Danielle, welcome back to an interesting day. >> It's I mean, it it interesting is is an understatement. It's it's been an electric day. >> It sure has. And and you know, I was just reviewing the tape. I had you on May 1st and last time you were on, you basically called this. You said wars would come in, shake the building up and and that the labor data was kind of, you know, lying here a little bit. Now, we've got a hard 10 minutes with you, so I want to get right to it and and folks stick with us because I want her read on why gold's really moving because today is not really what the textbook says. But, uh, let's start with Worsh Daniel. I mean, unanimous 12 to nothing to on the vote, but nine of the 18 officials turn around and want a hike. Six of them want two and the other nine see no move or a cut. I mean, he cut the statement by two/3s. He refused to file his own forecast, the dot plot. And plain English, you know, each official's private guess of where rates go and and he wouldn't give us one. So, is this chairman imposing his will on on day one or or a committee with more disagreement than the unanimous headlines let on? >> Well, I mean, he he characterized it as a good family fight. Um, but at the end of the day, you have to give Kevin Worst credit because >> he he had a unanimous vote. I mean, that was that that was absolutely shocking. Um, and I suspect that some of the gray hairs in the audience, by the way, including Jay Powell, >> were probably barking like a seal with happiness that he wanted to go back to being a more succinct institution that leaks less. Um, and I I think I I I I don't think that it was as difficult to um gather the ranks around him a as as he maybe anticipated that it would be because so many officials at the Fed have known for a very very long time that QE was a disaster, that using the balance sheet as a tool, it was was a failed experiment and that Fed speakers speak too much. So, um I think a lot of them today were kind of secretly rubbing their hands together and saying, "God, I've been waiting my entire career for this to happen. Let's do it." >> Yeah. So, I mean, you know, the real story is that he's already maybe has a little bit of control of the room, even if the dots show deep disagreement about kind of what comes next. I I want to ask you, I mean, this this simpler version, their own forecast for inflation by year end just jumped. I mean, 3.6% a core measure at 3.3 and they're saying it kind of gets stuck right here. No improvement. I mean, but they left unemployment low and and they called growth solid. And now here's my problem with that margin debt, the money investors borrow to buy stocks. I mean, that just hit a record $1.42 trillion. I mean, they've never owned this much against their cash. You live through Powell's 2018 liquidity scare. Is the Fed about to raise rates into a break? The solid data just doesn't show. >> That is uh that was the panic that we saw in the bond market today. Mhm. >> Uh I mean to have seen a flattening of the yield curve to the extent that we did was nothing short of of just surreal. Um and if the Fed was to invert the curve all the way, we're talking about a negative difference between the 2-year and the 10-year, I don't think they would have a record period of time for that curve to be inverted before the actual real hard economy stepped in with something to say about it. Because interest rates across the curve went up today >> with the very exception of the very longest duration. Jeremy, we have bankruptcies up 38.4% >> year to date, year overyear. These are enormous numbers. And I think that that's why it's critical that Worsh is going to try and try, mind you, he's still hiring. He's still recruiting. Um but he's going to try and and enter new data into the Fed's policym analysis and I think that that is absolutely critical because he basically said when asked is policy tight he said it depends. Yeah. >> You know if if if it's the housing section you're talking about clearly if it's the financial markets that you're talking about policy is clearly not restrictive. Um, but let's let's see. Let's see if like um if like Powell, which you're suggesting, he gets punched in the mouth. >> And if he does get punched in the mouth by the credit markets, >> then we will see what happens. But at least he said he's interested in knowing what's happening outside the Fed. I mean, that was good, too. >> Yeah. Yeah. And I mean, I saw some critique on on on X, too. I mean, the critique was kind of war says that the Fed will deliver price stability, but he won't give markets kind of a clear reaction function. Maybe that's the point. Powell overexplain and box the Fed in or maybe saying I'm not going to give you a map because the map keeps making markets front run the Fed is is less guidance actually more credible if inflation is still 3% plus less guidance is absolutely uh more critical and and we have to bear in mind that if if energy prices hold where they are and that's anybody's guess we're going to have some negative negative headline prints on headline CPI And I don't think that Worsh necessarily um is trying to to to give quarter to the hawks just to form a consensus. I think that he wants to look for a new way to measure inflation period. >> And he says that these these five task force will be completed by the end of the year at the latest. Look, as a former Fed insider, that is light speed. He's talking about going moving faster to to to initiate changes within the Fed at the fastest pace in the history of an institution born in 1913. >> Yeah. Yeah. Amen. And I mean, what surprised you the most today? You just brought it up. I mean, you've been inside that building. Was it Worsh's kind of refusing to submit a dot to to submit a dot or, you know, the fact that he still got that unanimous vote, the hawkish inflation forecast, or maybe this market reaction to, you know, in gold in in the two-year yield? Um, I certainly don't see the market's reaction as being surprising at all. I mean, Wall Street is absolutely addicted to foreign to to forward guidance. >> What I appreciated that he said the most, which echoed Jerome Powell was effectively, we don't care how the markets react. We are going to act and think independently of them. >> Yeah, well said. Okay. uh the one that our audience keeps waiting for. Gold ran up about 4383 this morning. Now it's got j slammed kind of nearly $150 the second that the Fed kind of went hawkish here. It's a down in the day more than 2% and it keeps falling while we heard wars continuing to talk. I think it's just up a little bit here now. It's a textbook reaction. Higher rates after inflation is stronger. Dollar gold gets sold but central banks aren't selling and and you've argued that this metal, you know, stopped trading on the Fed a while ago. So, is this dip a gift or or is the Fed right and Gold's run is kind of done here? >> Well, if what we were talking about before, if if Worsh is going to kind of be the new sheriff in town, >> Yeah. and maintains higher for longer and thereby helps facilitate a blowup in the private credit market that bleeds into the private equity market. Um then yeah, this was a great buying opportunity for gold because it doesn't matter where inflation is per se because in times of financial crisis, gold is where to hide. >> And before I let you go, I know you're tight here. I mean, what's that kind of one data point this whole market's ignoring as we head into summer? >> I think the market should be paying very close attention to the volatility in the Treasury market right now. Um, things are going to be very bumpy if if war succeeds in not allowing Fed speak run wild beginning Friday morning, which is a holiday. So, actually, I'm thinking out loud here, Jeremy, but we could we could possibly not hear from anybody inside the Fed, anybody at all until Monday, which is the definition of of of a vacuum for investors. Again, they're absolutely addicted to hanging on to every last word that every single Fed official says. And we could be talking about between here and next Monday, >> which, you know, that's that's a light year. We we it'd be quicker to get to Mars. As far as markets are concerned, >> a very different Fed here. I mean, markets sitting here waiting and I mean, if if private credit is where the blowup starts, talk about that trigger out here. I mean, you talked about the bankruptcy. Is it defaults? Is it that redemption pressure? Stale marks finally kind of getting written down or or lenders refusing to refinance as we've seen. >> Yeah. And and we're seeing more losses taken on commercial real estate. We're seeing uh the inability of Airbnb jocks to get refinanced, to roll those mortgages over. we're seeing a lot of serious pain points in the economy that would be exacerbated greatly um should rates stay where they are. So um you know he uh he may get his boss's wishes taken care of sooner than you would think if the market is going to force the Fed's hand um by way of something continuing because private credit's already blowing up. Private equity is following it. But let's see if it bleeds into the public markets and and Jay Pal's biggest boogeyman is is bond issuance affected. Do bond spreads in the public markets finally begin to move? Um these are going to be things that that Worsh is paying attention to and that Powell is happy to not have to worry about anymore. >> Yeah, you you've been calling for quite a bit of this. I mean, you and I have chatted about this quite a bit. Um anything today? Was it just kind of you feeling a little relieved or what are your thoughts? >> Um, I'm hopefully optimistic. That's what I am. I'm hopefully optimistic because what he did at the podium closely resembles the last chapter of Fed Up, the book that I that I wrote. Um, so these are things that I have been arguing for every one of his task force included for a decade now. anyone you think you seeing any tweets anybody that you think are going to be suspicious like in these roles for this these task force? >> Um uh no I think it's anyone's guess because he's taking outsiders. I mean again this is >> this is one of my own personal mandates is you have to bring in people who are on the receiving end of monetary policy before you can truly make monetary policy rather than just have it be a room full of academics. It's just not realistic or reasonable. So, it it literally is anybody's guess who he might be bringing onto these task force. And it's highly likely that we haven't heard about any of the individuals yet because it's it's it's clear that Worsh was uh was enjoying the element of surprise. very very much enjoying the he was extremely poised and charismatic and articulate, but you could just tell that he was so enjoying his moment. I hope it lasts. >> All right, you've been arguing for years that the Fed's model was too, you know, backward looking, too dependent on bad data, and too confident on its own forecast. We appreciate your time, Danielle D. Martino, booth, QI Research. The Daily Feather, always a reality check. Uh, we're going to have to not wait as long next time. Thanks for making the time. >> Absolutely. Thank you. >> Danielle had to run, but if you're just joining us, here's where we are in one line. And the Fed got tougher and it's tearing up how it talks to you. And the second part is the bigger story. Watch this. We've dropped forward guidance. Uh some along the committee, I think, dropped it, I suspect, from our discussion the last couple of days because they said at this moment in time, it doesn't feel as though providing forward guidance is right. Others have, I'd say, different views and think as a general proposition, forward guidance isn't the business we should be in, but that'll be taken up by the task force on communications and my policymaker uh colleagues. We're going to listen hard to what the experts say and make our own decision. Um, but I can't give you any forward guidance about what we're going to do next. The good news is we'll be meeting in six weeks. >> Forward guidance, that's the Fed's habit of telling markets its next move in advance. For 15 years, they did exactly that. Worsh just scrapped it. He even refused to file his own forecast. Said that the projections are written quote in pencil and aren't helpful for him. So, in plain English, the Fed is going to tell you less on purpose. By the way, less handholding means more surprises, more volatility, as Danielle just said. And every inflation report from here matters more than it did yesterday. Now, one strategist today called it a mini monetary policy revolution. And that's not hype. He's not stopping at that statement. Here's where it's actually headed. >> Let me turn now to a few words on a key initiative that we're announcing today. I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy. First, Fed communications. Second, the Fed's balance sheet. Third, our use and reliance on existing data sources. Fourth, productivity and jobs in an era of transformation. And last, the Fed's inflation frameworks. These subjects are timely, consequential, and in my view, worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days. For each of these independent task forces, I'm enlisting some of the very best minds both inside and outside the economics profession. They will be supported by subject matter specialists from our superb Fed staff, and they'll have a straightforward charge. Start with first principles, ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policymaker consideration. Since last summer, my colleagues discuss possible improvements in the form and function of Fed communications. This new task force will build on that effort and I expect propose some well-considered changes, including to the SCP I mentioned a few moments ago. The second task force, the one on balance sheet policy, will review the benefits and risks of the current ample reserves regime and the composition of the Fed's balance sheet. They will assess alternative frameworks for the conduct and operation of monetary policy. The third task force, the one on data, will evaluate new information sources and consider methodological changes to improve data gathering with the aim of giving policymakers more accurate, relevant, contemporaneous, and perhaps most important, actionable information on the state of our economy. Fourth, the task force on productivity and jobs. It'll survey the pace, the reach, the economic impact of new general purpose technologies, including AI, and explore the implications for the for the Fed in pursuit of our employment and inflation mandates. The last task force, the one on inflation frameworks that'll examine the drivers of inflation first principles and weigh the full range of ideas for delivering price stability in a changing economy. You'll hear quite a bit more about these task forces and this overall initiative in the coming weeks. Enough for now to make a simple statement. Each task force will serve an objective shared by everyone in the system. shared by everyone around that table that I sat with over the last couple of days. A Federal Reserve that is cleareyed about its mission, fit for purpose, and focused on the future. You just heard the list task force on the Fed Communications, the balance sheet, the data that the Fed relies on, productivity and jobs, and its inflation framework. Now, two of those should uh jump out. He's putting the Fed's own data under review. in the same man who's today called the official job number echoes uh that don't really reflect the real 2026 economy and he's reviewing the inflation framework itself. Now to be clear he said that the 2% target stays he's not touching that number until they hit it but how they chase it is now on the table. Now this is Kevin Worsh institutionalizing the change he's talked about for years and giving everyone in the building a seat. So it's not Warsh versus the world. So bottom line in plain English, a Fed that just got tougher. Half the committee wanting to raise rates, a chairman tearing up the playbook and gold down nearly 2% on the day. Uh higher for longer just got real. If you want the actual numbers and not the spin, do me a favor, hit subscribe right now. Drop a comment with your inflation uh real inflation rate, I guess, you're feeling in your own city. I read everyone and it shapes these interviews. I'm Jeremy Saffron for all of us here at Kitco. Thanks for watching. Heat. Heat.
The New Fed Chair Just Tore Up The Playbook On Day One | DiMartino Booth
Summary
Transcript
I wouldn't prejudge what happens in the future, but there was only one big subject for us. We took it on. We had a good family fight on it for a couple of days, and we ended up, I think, in a better place. That's Kevin Walsh, the brand new Fed chair, describing his very first meeting, and he said it warmly. But here's what's behind that good family fight. Even with a unanimous vote today, someone in that room floated a rate cut before they settled on a hold. Now in 90 minutes, Worsh broke clean from the Powell era. He scrapped the signal that rate cuts were coming. He refused to file his own rate forecast. And half of this committee now wants to raise rates this year. And the market verdict was instant. Looking over at gold. I mean, it ran up to about 43.83 this morning, then got cut nearly $150, down more than 2% on the day. Meanwhile, stocks fell. The dollar jumped. So, is this Fed about to raise rates into the most indebted market in history? And stick with me. I'll translate all of it into what it means for your money. But first, someone who's actually sat inside that building. Joining me now is Fed insider Danielle D. Martino Boo, CEO of Qi Research, author of the Daily Feather. Uh Danielle, welcome back to an interesting day. >> It's I mean, it it interesting is is an understatement. It's it's been an electric day. >> It sure has. And and you know, I was just reviewing the tape. I had you on May 1st and last time you were on, you basically called this. You said wars would come in, shake the building up and and that the labor data was kind of, you know, lying here a little bit. Now, we've got a hard 10 minutes with you, so I want to get right to it and and folks stick with us because I want her read on why gold's really moving because today is not really what the textbook says. But, uh, let's start with Worsh Daniel. I mean, unanimous 12 to nothing to on the vote, but nine of the 18 officials turn around and want a hike. Six of them want two and the other nine see no move or a cut. I mean, he cut the statement by two/3s. He refused to file his own forecast, the dot plot. And plain English, you know, each official's private guess of where rates go and and he wouldn't give us one. So, is this chairman imposing his will on on day one or or a committee with more disagreement than the unanimous headlines let on? >> Well, I mean, he he characterized it as a good family fight. Um, but at the end of the day, you have to give Kevin Worst credit because >> he he had a unanimous vote. I mean, that was that that was absolutely shocking. Um, and I suspect that some of the gray hairs in the audience, by the way, including Jay Powell, >> were probably barking like a seal with happiness that he wanted to go back to being a more succinct institution that leaks less. Um, and I I think I I I I don't think that it was as difficult to um gather the ranks around him a as as he maybe anticipated that it would be because so many officials at the Fed have known for a very very long time that QE was a disaster, that using the balance sheet as a tool, it was was a failed experiment and that Fed speakers speak too much. So, um I think a lot of them today were kind of secretly rubbing their hands together and saying, "God, I've been waiting my entire career for this to happen. Let's do it." >> Yeah. So, I mean, you know, the real story is that he's already maybe has a little bit of control of the room, even if the dots show deep disagreement about kind of what comes next. I I want to ask you, I mean, this this simpler version, their own forecast for inflation by year end just jumped. I mean, 3.6% a core measure at 3.3 and they're saying it kind of gets stuck right here. No improvement. I mean, but they left unemployment low and and they called growth solid. And now here's my problem with that margin debt, the money investors borrow to buy stocks. I mean, that just hit a record $1.42 trillion. I mean, they've never owned this much against their cash. You live through Powell's 2018 liquidity scare. Is the Fed about to raise rates into a break? The solid data just doesn't show. >> That is uh that was the panic that we saw in the bond market today. Mhm. >> Uh I mean to have seen a flattening of the yield curve to the extent that we did was nothing short of of just surreal. Um and if the Fed was to invert the curve all the way, we're talking about a negative difference between the 2-year and the 10-year, I don't think they would have a record period of time for that curve to be inverted before the actual real hard economy stepped in with something to say about it. Because interest rates across the curve went up today >> with the very exception of the very longest duration. Jeremy, we have bankruptcies up 38.4% >> year to date, year overyear. These are enormous numbers. And I think that that's why it's critical that Worsh is going to try and try, mind you, he's still hiring. He's still recruiting. Um but he's going to try and and enter new data into the Fed's policym analysis and I think that that is absolutely critical because he basically said when asked is policy tight he said it depends. Yeah. >> You know if if if it's the housing section you're talking about clearly if it's the financial markets that you're talking about policy is clearly not restrictive. Um, but let's let's see. Let's see if like um if like Powell, which you're suggesting, he gets punched in the mouth. >> And if he does get punched in the mouth by the credit markets, >> then we will see what happens. But at least he said he's interested in knowing what's happening outside the Fed. I mean, that was good, too. >> Yeah. Yeah. And I mean, I saw some critique on on on X, too. I mean, the critique was kind of war says that the Fed will deliver price stability, but he won't give markets kind of a clear reaction function. Maybe that's the point. Powell overexplain and box the Fed in or maybe saying I'm not going to give you a map because the map keeps making markets front run the Fed is is less guidance actually more credible if inflation is still 3% plus less guidance is absolutely uh more critical and and we have to bear in mind that if if energy prices hold where they are and that's anybody's guess we're going to have some negative negative headline prints on headline CPI And I don't think that Worsh necessarily um is trying to to to give quarter to the hawks just to form a consensus. I think that he wants to look for a new way to measure inflation period. >> And he says that these these five task force will be completed by the end of the year at the latest. Look, as a former Fed insider, that is light speed. He's talking about going moving faster to to to initiate changes within the Fed at the fastest pace in the history of an institution born in 1913. >> Yeah. Yeah. Amen. And I mean, what surprised you the most today? You just brought it up. I mean, you've been inside that building. Was it Worsh's kind of refusing to submit a dot to to submit a dot or, you know, the fact that he still got that unanimous vote, the hawkish inflation forecast, or maybe this market reaction to, you know, in gold in in the two-year yield? Um, I certainly don't see the market's reaction as being surprising at all. I mean, Wall Street is absolutely addicted to foreign to to forward guidance. >> What I appreciated that he said the most, which echoed Jerome Powell was effectively, we don't care how the markets react. We are going to act and think independently of them. >> Yeah, well said. Okay. uh the one that our audience keeps waiting for. Gold ran up about 4383 this morning. Now it's got j slammed kind of nearly $150 the second that the Fed kind of went hawkish here. It's a down in the day more than 2% and it keeps falling while we heard wars continuing to talk. I think it's just up a little bit here now. It's a textbook reaction. Higher rates after inflation is stronger. Dollar gold gets sold but central banks aren't selling and and you've argued that this metal, you know, stopped trading on the Fed a while ago. So, is this dip a gift or or is the Fed right and Gold's run is kind of done here? >> Well, if what we were talking about before, if if Worsh is going to kind of be the new sheriff in town, >> Yeah. and maintains higher for longer and thereby helps facilitate a blowup in the private credit market that bleeds into the private equity market. Um then yeah, this was a great buying opportunity for gold because it doesn't matter where inflation is per se because in times of financial crisis, gold is where to hide. >> And before I let you go, I know you're tight here. I mean, what's that kind of one data point this whole market's ignoring as we head into summer? >> I think the market should be paying very close attention to the volatility in the Treasury market right now. Um, things are going to be very bumpy if if war succeeds in not allowing Fed speak run wild beginning Friday morning, which is a holiday. So, actually, I'm thinking out loud here, Jeremy, but we could we could possibly not hear from anybody inside the Fed, anybody at all until Monday, which is the definition of of of a vacuum for investors. Again, they're absolutely addicted to hanging on to every last word that every single Fed official says. And we could be talking about between here and next Monday, >> which, you know, that's that's a light year. We we it'd be quicker to get to Mars. As far as markets are concerned, >> a very different Fed here. I mean, markets sitting here waiting and I mean, if if private credit is where the blowup starts, talk about that trigger out here. I mean, you talked about the bankruptcy. Is it defaults? Is it that redemption pressure? Stale marks finally kind of getting written down or or lenders refusing to refinance as we've seen. >> Yeah. And and we're seeing more losses taken on commercial real estate. We're seeing uh the inability of Airbnb jocks to get refinanced, to roll those mortgages over. we're seeing a lot of serious pain points in the economy that would be exacerbated greatly um should rates stay where they are. So um you know he uh he may get his boss's wishes taken care of sooner than you would think if the market is going to force the Fed's hand um by way of something continuing because private credit's already blowing up. Private equity is following it. But let's see if it bleeds into the public markets and and Jay Pal's biggest boogeyman is is bond issuance affected. Do bond spreads in the public markets finally begin to move? Um these are going to be things that that Worsh is paying attention to and that Powell is happy to not have to worry about anymore. >> Yeah, you you've been calling for quite a bit of this. I mean, you and I have chatted about this quite a bit. Um anything today? Was it just kind of you feeling a little relieved or what are your thoughts? >> Um, I'm hopefully optimistic. That's what I am. I'm hopefully optimistic because what he did at the podium closely resembles the last chapter of Fed Up, the book that I that I wrote. Um, so these are things that I have been arguing for every one of his task force included for a decade now. anyone you think you seeing any tweets anybody that you think are going to be suspicious like in these roles for this these task force? >> Um uh no I think it's anyone's guess because he's taking outsiders. I mean again this is >> this is one of my own personal mandates is you have to bring in people who are on the receiving end of monetary policy before you can truly make monetary policy rather than just have it be a room full of academics. It's just not realistic or reasonable. So, it it literally is anybody's guess who he might be bringing onto these task force. And it's highly likely that we haven't heard about any of the individuals yet because it's it's it's clear that Worsh was uh was enjoying the element of surprise. very very much enjoying the he was extremely poised and charismatic and articulate, but you could just tell that he was so enjoying his moment. I hope it lasts. >> All right, you've been arguing for years that the Fed's model was too, you know, backward looking, too dependent on bad data, and too confident on its own forecast. We appreciate your time, Danielle D. Martino, booth, QI Research. The Daily Feather, always a reality check. Uh, we're going to have to not wait as long next time. Thanks for making the time. >> Absolutely. Thank you. >> Danielle had to run, but if you're just joining us, here's where we are in one line. And the Fed got tougher and it's tearing up how it talks to you. And the second part is the bigger story. Watch this. We've dropped forward guidance. Uh some along the committee, I think, dropped it, I suspect, from our discussion the last couple of days because they said at this moment in time, it doesn't feel as though providing forward guidance is right. Others have, I'd say, different views and think as a general proposition, forward guidance isn't the business we should be in, but that'll be taken up by the task force on communications and my policymaker uh colleagues. We're going to listen hard to what the experts say and make our own decision. Um, but I can't give you any forward guidance about what we're going to do next. The good news is we'll be meeting in six weeks. >> Forward guidance, that's the Fed's habit of telling markets its next move in advance. For 15 years, they did exactly that. Worsh just scrapped it. He even refused to file his own forecast. Said that the projections are written quote in pencil and aren't helpful for him. So, in plain English, the Fed is going to tell you less on purpose. By the way, less handholding means more surprises, more volatility, as Danielle just said. And every inflation report from here matters more than it did yesterday. Now, one strategist today called it a mini monetary policy revolution. And that's not hype. He's not stopping at that statement. Here's where it's actually headed. >> Let me turn now to a few words on a key initiative that we're announcing today. I'm appointing a task force in each of five areas that are central to the broad conduct of monetary policy. First, Fed communications. Second, the Fed's balance sheet. Third, our use and reliance on existing data sources. Fourth, productivity and jobs in an era of transformation. And last, the Fed's inflation frameworks. These subjects are timely, consequential, and in my view, worthy of a fresh look. My colleagues and I discussed them with energy and purpose over the last couple of days. For each of these independent task forces, I'm enlisting some of the very best minds both inside and outside the economics profession. They will be supported by subject matter specialists from our superb Fed staff, and they'll have a straightforward charge. Start with first principles, ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policymaker consideration. Since last summer, my colleagues discuss possible improvements in the form and function of Fed communications. This new task force will build on that effort and I expect propose some well-considered changes, including to the SCP I mentioned a few moments ago. The second task force, the one on balance sheet policy, will review the benefits and risks of the current ample reserves regime and the composition of the Fed's balance sheet. They will assess alternative frameworks for the conduct and operation of monetary policy. The third task force, the one on data, will evaluate new information sources and consider methodological changes to improve data gathering with the aim of giving policymakers more accurate, relevant, contemporaneous, and perhaps most important, actionable information on the state of our economy. Fourth, the task force on productivity and jobs. It'll survey the pace, the reach, the economic impact of new general purpose technologies, including AI, and explore the implications for the for the Fed in pursuit of our employment and inflation mandates. The last task force, the one on inflation frameworks that'll examine the drivers of inflation first principles and weigh the full range of ideas for delivering price stability in a changing economy. You'll hear quite a bit more about these task forces and this overall initiative in the coming weeks. Enough for now to make a simple statement. Each task force will serve an objective shared by everyone in the system. shared by everyone around that table that I sat with over the last couple of days. A Federal Reserve that is cleareyed about its mission, fit for purpose, and focused on the future. You just heard the list task force on the Fed Communications, the balance sheet, the data that the Fed relies on, productivity and jobs, and its inflation framework. Now, two of those should uh jump out. He's putting the Fed's own data under review. in the same man who's today called the official job number echoes uh that don't really reflect the real 2026 economy and he's reviewing the inflation framework itself. Now to be clear he said that the 2% target stays he's not touching that number until they hit it but how they chase it is now on the table. Now this is Kevin Worsh institutionalizing the change he's talked about for years and giving everyone in the building a seat. So it's not Warsh versus the world. So bottom line in plain English, a Fed that just got tougher. Half the committee wanting to raise rates, a chairman tearing up the playbook and gold down nearly 2% on the day. Uh higher for longer just got real. If you want the actual numbers and not the spin, do me a favor, hit subscribe right now. Drop a comment with your inflation uh real inflation rate, I guess, you're feeling in your own city. I read everyone and it shapes these interviews. I'm Jeremy Saffron for all of us here at Kitco. Thanks for watching. Heat. Heat.