Inflation and the Fed

Stronger-than-expected US inflation data has led Syz to forecast no rate cuts for the remainder of 2026. The incoming Fed Chair Kevin Warsh is expected to prioritize inflation credibility and balance sheet reduction.

Key Takeaways

• 1.No further rate cuts are expected until the end of 2026 due to broadening inflationary pressures in CPI and PPI data.
• 2.Kevin Warsh, the likely new Fed Chair, plans to prioritize inflation credibility and a smaller Fed balance sheet.
• 3.Jerome Powell will remain on the Board of Governors for now, acting as a check on rapid regulatory or policy shifts.

Table of Contents

• What is likely to change under new Fed Chair Kevin Warsh?
• Jerome Powell will stay on the Board of Governors for now – does it matter?
• What if Powell were to eventually step down from the Board of Governors?
• The latest CPI print is not a support for Warsh and lower key rates ...
• ... and the PPI print neither: the measure rose with the fastest pace since 2022

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