All eyes will be on Kevin Warsh this week as he chairs his first FOMC meeting. However, with PCE inflation on track to top 4% in May, the more pressing question is whether the Fed should raise rates this year. The debate around the FOMC table will be critical, and I worry that Warsh’s efforts to rein in forward guidance could bury it. Obscure a hawkish shift now, and markets get an unwelcome surprise if the Fed actually moves. The uncertainty itself could add to borrowing costs. Inflation, not the labor market, is the problem that the Fed faces. In some ways, that’s an improvement from last year when both sides of ... (full story)