FHN Financial Economic Weekly: Friday, July 17, 2026

Kevin Warsh’s first monetary-policy testimony went smoothly this week, partly because inflation tumbled in June. Still, he has his work cut out. June CPI and PPI data showed not only energy price relief coming into the core, but a much faster transmission to the core than was typical as recently as four years ago. A faster corporate pricing function, born from five years of supply and demand shocks, means inflation is likely to remain volatile in the years ahead. In the meantime, the Fed’s approach to monetary policy has become slapdash. It is less scientific and more feelings-based than ever before. Thankfully, there’s not just a taskforce for that, there are five. Still, it will take time to reintroduce discipline to the policy process.

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