Today's Post - https://bahnsen.co/4wwsHI5

David Bahnsen reviews this week’s Fed meeting, noting some credible forecasts expected a surprise 25–50 bp hike, though the Fed ultimately held. He argues the Fed’s rationale was unusually direct: financial conditions tightened without a hike as yields rose across the curve, and further tightening should prioritize stopping balance-sheet expansion after $200–$250B of added assets this year. Bahnsen contrasts camps calling for hikes because inflation has stayed above 2% with those citing falling TIPS-implied inflation expectations near 2%, while emphasizing Warsh’s market-focused approach and opposition to investors “gaming” Fed guidance (“play the ball, not the referee”). Warsh rejects a Phillips-curve tradeoff, saying price stability and full employment are not in conflict and inflation harms labor markets. Bahnsen expects falling hike odds and is skeptical rates rise this year, viewing Warsh as reform-minded but incremental, independent from President Trump despite citing tariffs and oil-driven supply shocks.

00:00 Welcome and Setup

00:36 Why This Fed Meeting

03:36 Case for Rate Hike

05:12 Fed Transparency Shift

08:22 Markets Tightened Already

10:21 Balance Sheet First

14:11 Warsh Philosophy Shift

16:50 Hike Odds and Outlook

17:55 Independence and Politics

20:47 Closing Takeaways

22:44 Sign Off and Weekend

Links mentioned in this episode: DividendCafe.com

TheBahnsenGroup.com