US Macro Insights

Latest edition · September 21, 2026

What Warsh is Watching The Chair s Preferred Indicators in Focus

Fed Chair Kevin Warsh's reaction function centers on inflation breadth, broad financial conditions, and alternative underlying inflation gauges like trimmed mean and median PCE. While Natixis sees a chance that the September hike was 'one and done', ongoing data noise will likely prompt one final policy rate hike in December or January.

Despite a lack of explicit forward guidance from Fed Chair Kevin Warsh, his public statements reveal that the Fed's reaction function is heavily guided by inflation breadth (subcomponents above 3%), financial conditions, and trimmed/median underlying inflation metrics. His remark that the September hike removed 'a dose of accommodation' suggests he viewed policy as having been loose rather than restrictive. Although underlying inflation pressures are cooling following supply shocks from tariffs and energy prices, Natixis expects noisy near-term inflation prints to push the FOMC to deliver one more rate hike in December 2026 or January 2027.

Key takeaways from the latest edition

• 1.Fed Chair Kevin Warsh tracks inflation breadth (subcomponents running above 3%), financial conditions, and alternative underlying inflation measures (trimmed mean and median) to evaluate policy stance.
• 2.Warsh's characterization of the September policy move as removing 'a dose of accommodation' implies the Fed considered prior policy accommodative and may require further adjustments, diverging from Governors Waller and Williams.
• 3.Natixis forecasts that while a 'one-and-done' hike is possible due to slowing underlying inflation trends, noisy monthly data will likely lead the Fed to implement one more rate hike in December or January.

What this series covers

• Breadth of Inflation
• Financial Conditions
• Underlying Inflation
• 'We Removed A Dose of Accommodation'
• Our views on the near-term policy rate

Edition archive

• What Warsh is Watching The Chair s Preferred Indicators in Focus

  September 21, 2026

• Jackson Hole Recap Grounded but not predictable

  August 28, 2026

• Changing our Fed Call Hawkish Warsh Forces a Fed Rethink

  June 18, 2026