Play the Ball, Says Warsh as Fed Keeps Inflation Front and Center; SPY, Bonds React

Federal Reserve Chair Kevin Warsh told markets on Wednesday to stop trading his intentions and start trading the data. Participants are learning to play the ball, not the referee, he said.

The remark landed hours after the Federal Open Market Committee (FOMC) held rates steady in a 9 to 3 vote. Warsh refused to call the outcome a pause.

Why Warsh Told Markets to Play the Ball

Warsh built his press conference around one message. Inflation sits above target, and the committee intends to bring it down.

The FOMC statement kept the federal funds range at 3.50% to 3.75%. It carried no forward guidance, a clear break from the Jerome Powell era.

Warsh also rejected the idea of a flexible goal. Five years of elevated prices, he argued, left an impression that the Fed quietly tolerated inflation above 2%.

He played down the June core Consumer Price Index (CPI) print as well. The trend matters more than any single month, he said, and inflation cannot be cured in nine weeks.

"We will deliver price stability," Warsh assured.

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