Fed Chair Warsh says balance sheet should be as small as possible, and can expand when there's a crisis

Newsquawk Staff · 15 Jul 2026, 15:21 UTC

Corporate earnings look to be broadening out.
If there were a disappointment on what AI could do, much of the AI-related capex investments still have alternative uses.

Trump

'Don't have anything for you' on if he has talked to Trump.
Would keep head down if Trump tried to influence policy.

Labour Market

Labour market is in good shape; not sure if rate cuts are what caused that.

Inflation

Monpol has caused inflation.
Not happy with any measures of inflation.

Task forces

Task forces have 6 months; will start getting briefings from task forces as early as September.
Monetary aggregates are not perfect, but it's a good cross-check.
If had used them in 2021 might have seen inflation sooner.
Will take consideration of both Fed mandates when taking on task force recommendations.

Economy

Focus is the real economy, and his message to markets is respond to real economy not to what Fed says.

What our latest note said

US Market Open, 22 Oct, 10:37 UTC · what it led with

Iran's IRGC Navy warned that US efforts to encourage passage could result in strikes on US bases.
Iran's Major General Rezaei said Iran has presented seven new conditions through mediators and will neither reopen the Strait of Hormuz nor resume negotiations until they are met.

Read the whole note Free to read.

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Headlines that moved markets

Headlines from our feed, and what the market did next.

Riksbank maintains its rate at 1.75% as expected; assesses that the probability of a rate increase later this year remains; there is considerable uncertainty and developments call for vigilance
EUR/SEK+0.3%
Norges Bank maintains its rate at 4.25% as expected; may still become necessary to raise the policy rate
EUR/NOK+0.6%
Iran and US talks continue, and reports that the deal is close are wrong.
WTI crude+1.5%

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