Chamath Palihapitiya
· Chamath Palihapitiya
· June 18, 2026 at 15:44
· ⏱ 4 min read
| Read on Substack ↗
Summary
New Fed Chair Kevin Warsh intends to run a less communicative, more surprise-oriented central bank, which could increase risk premiums and put downward pressure on bond prices and stock valuations regardless of actual rate moves, reshaping how the Fed interacts with markets.
•Newly confirmed Fed Chair Kevin Warsh held the benchmark rate at 3.5–3.75% in a unanimous first vote, but nearly half the committee expects a hike before year-end.
•Warsh abstained from submitting a dot in the Summary of Economic Projections, signaling a potential change to how the Fed communicates its outlook.
•CPI inflation is at 4.2% year-over-year (three-year high), driven by an energy-price spike and well above the Fed's 2% target.
•Unemployment is steady at 4.3%, remaining in the 4–5% range over the past two years.
•Outgoing Chair Jerome Powell is staying on the Fed board until 2028, retaining a vote on every rate decision Warsh makes.
•Warsh articulated a vision for a leaner central bank that acts less, telegraphs less, and treats market surprise as a feature rather than a flaw.