Newsletter · · Ashutosh Agarwal

The Hawkish Hangover and Japan's Turn - The Dollar Brief - Week of September 18, 2026

The Dollar Brief for the week of September 18, 2026 (podcasts recorded September 11 to 17, 2026): a synthesis of the week's macro and FX podcasts on the morning after the Fed's hawkish hike, the dollar's next-day fade back below 156 on dollar/yen and under 5% on the ten-year, Trump swinging at his own Fed chair and then softening, the emerging \"policy mistake\" camp, the long end reframed as a hyperscaler borrowing story, the dollar \"leaking\" toward low-debt currencies, squared-off yen shorts, and the Bank of Japan's decision landing today.

The Dollar Brief

Week of September 18, 2026: The Hawkish Hangover and Japan's Turn

Two days ago the Federal Reserve hiked and the dollar did what the textbooks promised: it jumped. One day later, it started giving the gains back. By Thursday morning the ten-year Treasury yield had slipped back below 5%, the dollar had faded off its highs against the yen, and the stock market, which was supposed to hate a hawkish central bank, was busy printing new highs for the week. The story this week is not the hike itself. It's the morning after: a market quickly second-guessing whether one quarter-point move and a stern press conference really change anything, a president who swung at his own Fed chair and then softened, a chorus of serious voices calling the hike a mistake, and Japan, which decides on rates today, as the next domino. Let's get into it.

(Quick plain-English glossary, skip if you live in this stuff. The "dollar" is the US dollar; the "DXY" measures it against a basket of other rich-world currencies. To be "long" the dollar is to bet it rises; "short" is the opposite. A "Treasury" is a loan to the US government; its interest rate is its "yield," and yields rise when bond prices fall. The "2-year" tracks what the Fed is expected to do; the "10-year" and "30-year" ("the long end") set mortgage and corporate borrowing costs. The "FOMC" is the Fed's rate-setting committee; a "hike" raises its short-term rate. The "dot plot" is the chart where each official marks where they think rates are going. "Restrictive" means rates high enough to slow the economy; "accommodative" is the opposite. "PCE" is the Fed's preferred inflation gauge. The "carry trade" is borrowing cheaply in a low-rate currency (for years the yen) to buy higher-yielding things elsewhere; unwinding it means selling those things and buying yen back. "Real yield" is the yield after subtracting inflation. "Term premium" is the extra yield investors demand for the risk of lending long. "Hyperscalers" are the giant cloud/AI builders: Microsoft, Google, Amazon, Meta. "Money supply" is the total amount of money sloshing around the economy. "Buybacks" here means the Treasury repurchasing its own older bonds to try to push long-term rates down. The "BOJ" and "BOE" are the central banks of Japan and England.)

TL;DR

  • The dollar's big hawkish rally started to reverse within a day. Saxo's John Hardy, on the road Thursday morning: the dollar "did rally quite strongly" (euro/dollar as low as 114.56, dollar/yen up to "156.30") "but it's now trading this morning down very well below 156," with the 10-year "back decently below 5%" (Saxo Market Call, Sep 17).
  • The dollar index did claw back above 100, its first time since July, but it's still stuck in its 18-month range. No breakout, just a bounce (Market Maker, Sep 17).
  • Trump swung, then blinked. He first demanded rates "should be at one percent or lower," then told reporters "I'm relying on Kevin," revealed he'd told Warsh "you might as well vote with the board because it's not going to matter," and deflected blame to the rest of the committee, while floating fresh tariffs on Europe (Bloomberg Daybreak: US Edition, Sep 17).
  • Warsh drew a hard line on independence, in his own words: "Independence is a two-way street… Part of the independence of the Federal Reserve is we stay in our lane." And a phrase to remember: "inflation is a choice. And today, we took a step in delivering it" (The Paul Barron Crypto Show, Sep 16).
  • The loudest new dissent: "the Fed made a policy mistake." Economist David Rosenberg: they are "tightening into a de facto tax increase," and he raised cash in his model portfolio and plans to "double up" (RiskReversal Pod, Sep 17). Former Fed advisor Danielle DiMartino Booth: calling policy "not restrictive" is "ludicrous" with small-business bankruptcies "up 64% year over year" (Coin Stories with Natalie Brunell, Sep 17).
  • A veteran bond voice says the hike was too timid, and the point was trust, not the number. Harley Bassman: "he probably wanted to do 50… he should have wanted to do 50 and get done with," because "the Fed needs to go and regain the trust of the market" (Macro Voices, Sep 17).
  • The long end may be an AI problem, not a Fed problem. Bassman: hyperscalers are on track to borrow "$750 [billion]" while the Treasury issues "$2 [trillion]": "30%, 35% competition for money… The Fed can't stop this" (Macro Voices, Sep 17).
  • The clearest FX read: the dollar is "leaking." FX strategist Jens Nordvig: as the 30-year "started to wobble… the dollar started to leak," and money is now favoring low-debt currencies (Switzerland, Singapore, Australia) because on debt metrics "it's actually the United States" that's now the worst, having overtaken Japan (The Compound and Friends, Sep 11).
  • Positioning has quietly flipped on the yen. The crowded bet against the yen has been squared off: "a 100,000 contract shift away from yen shorts… almost flat now, finally" (Saxo Market Call, Sep 14).
  • Around the world: the Bank of England held 6–3 at 3.75%, and the Bank of Japan decides today. A BOJ hike that meets expectations is unlikely to be aggressive after the Fed's hawkish blast (The David Lin Report, Sep 17; Saxo Market Call, Sep 17).

What's New

The morning after: the dollar gives some back

Here's the development that matters most for a dollar newsletter. The hawkish hike worked for about a day, and then the market began to unwind it.

Saxo Bank's John Hardy, recording from the road on Thursday, laid out the round trip cleanly. Into the meeting the dollar had "rallied quite strongly." Euro/dollar punched down to "114.56" and dollar/yen squeezed "decently above 156. So 156.30, in fact." But by Thursday morning "it's now trading down very well below 156. I saw a print a minute ago of 155.60 something." His read on why: "it looks like people are using the liquidity to get involved in fresh dollar yen shorts": in plain terms, traders were using the dollar's pop as a chance to bet against it (Saxo Market Call, Sep 17). The bond market told the same story: the two-year "up around seven basis points after… dipping quite aggressively into the actual meeting," while the ten-year was "back decently below 5%." Hardy even wondered aloud "if we're at some sort of pivot here in terms of yields."

The equity side underlines how quickly the hawkish shock wore off. The UK's Market Maker podcast noted that S&P 500 and Nasdaq futures were "up almost a percent" the next morning, "new highs for the week on the Nasdaq… having sold off last night." Their explanation is the optimistic one: with Fed independence "re-established," investors think the long end can now drift lower, and "you could start to see long-term yields trend lower, which is ultimately good news for everything." On the dollar itself they were more measured: yes, the index "has gone back above 100… the first time we've been above 100 since end of July," but "more broadly… it's still kind of well within its range of the last 18 months. You haven't got any major breakouts there" (Market Maker, Sep 17). So: a real bounce, not a regime change, at least not yet.

Trump swings, then blinks, and points at Europe

The Fed-independence drama got a sharper edge, and it's worth hearing Trump in his own words rather than through a summary. Speaking to reporters, he mixed grievance with a strange kind of resignation: "I'm relying on Kevin, but he's got a very tough board. He's got a board that was put there by a lot of other people. And the interest rates are too high. They're not appropriate. And I told, I talked to Kevin and I said, you might as well vote with the board because it's not going to matter" (Bloomberg Daybreak: US Edition, Sep 17). He then repeated that rates "should be at one percent or lower."

Notice the maneuver: after the initial "1% or less" blast on Truth Social, Trump said he still had confidence in Warsh ("with whom he has a longstanding personal relationship") and redirected his anger at the rest of the committee, which of course still includes former chair Jay Powell (Market Maker, Sep 17). The same Bloomberg segment that carried Trump's remarks was titled around his other move of the day: floating fresh tariffs on Europe. For a dollar that spent months weighed down by "is the Fed still independent" worries, a president who huffs but ultimately says "I'm relying on Kevin" is, oddly, part of the bull case: the test the Fed just passed.

Two former regional Fed presidents, interviewed on the same program, split on how far this goes. James Bullard: "a pretty good outcome for the Fed. They got their interest rate increase in, which I think was appropriate." Patrick Harker was more cautious on the market's enthusiasm for a whole series of hikes: "three more sounds a little high compared to what the committee seemed to be saying. They probably want to see more data before they commit to that" (Bloomberg Daybreak: US Edition, Sep 17). (Bullard and Harker are former Fed insiders.)

Warsh's line: "Independence is a two-way street"

The clearest new window into the chair's thinking came from his actual press-conference answers. Asked point-blank whether the hike, the opposite of what the president wanted, was "another test of the Fed's independence," Warsh refused to bite on any conversations with Trump and reframed it: "I'm not a Wall Street newsletter. Part of the independence of the Federal Reserve is we stay in our lane. Independence is a two-way street. We'll let people that do trade policy and fiscal policy stay in their lane too" (The Paul Barron Crypto Show, Sep 16).

He was just as pointed on process. Asked about all the pre-meeting obsession over one inflation print, he pushed back on the whole idea of reacting to single data releases: "Trends matter. Data points are noisy. Data point dependence is a dangerous preoccupation." And he kept returning to a single moral frame: "inflation is a choice. And today, we took a step in delivering it." On who gets hurt by higher rates, he pointed to "the least well off… people that don't own financial assets," arguing that stable prices are what let a paycheck "put their head above water." Whether you buy the logic or not, it's a chair deliberately building a plain, repeatable story, which is exactly what a currency wants from the institution that stands behind it.

"The Fed made a policy mistake": the dissent gets louder

Against the market's relief, a serious bearish camp is forming, and it's not the usual permabears. David Rosenberg, the former Merrill Lynch chief economist who now runs Rosenberg Research, was blunt on RiskReversal within an hour of the presser: "I think the Fed made a policy mistake. I think that they are now setting us up for a series of policy mistakes in the next year" (RiskReversal Pod, Sep 17).

His core objection is about what kind of inflation this is. The Fed is raising rates into an oil-and-tariff supply shock ("a supply shock that's taken energy costs up, call it 40%") which he likens to "tightening into a de facto tax increase." That, he argues, is nothing like the demand-driven inflation of 2021–22. He also picked apart Warsh's "tight labor market" claim: "how can you say the labor market is tight… when nominal wage growth is slowing down?… we're down to 3% year-over-year in average hourly earnings. It hasn't been this weak in five years." His response with real money: "I just raised 10% cash last week in that model portfolio. I'm going to probably double up on that." He also noticed what the bond market did, or didn't, do: "the two-year note… is up 10 basis points. The 10-year lost its rally." Co-host Guy Adami had expected the opposite, a hike that would "have a calming influence… make the back end of the curve go lower." It didn't, cleanly. (Rosenberg and Adami are strategists/market commentators, not policymakers.)

Danielle DiMartino Booth, who advised the Dallas Fed before founding QI Research, was if anything harsher on the "not restrictive" consensus: it's "ludicrous when you consider the fact that small business bankruptcies are up 64% year over year. We've seen more than 200 companies closing every single month now for five months running." Her read of the price action matched Saxo's: the market "interpreted [it] initially as being a dovish hike until Warsh… alluded to the fact that there could be follow-through because of higher energy prices into broader inflation… at which point the market completely fell out of the bed." On what comes next, she doubts an October move: "Will he hike rates in October, October the 28th, six days before the midterm elections? That would be political suicide." And she flagged the fiscal squeeze from the government's borrowing style: "the two-year treasuries north of 4.7%… the U.S. government is borrowing at the very short end," with the debt having "just crossed $40 trillion" and "$250 billion" added "every single quarter" (Coin Stories with Natalie Brunell, Sep 17). (DiMartino Booth is a former Fed insider, now an independent researcher.)

"Hike 50, one and done": the trust argument

Not every skeptic wanted a smaller move; one wanted a bigger one. Harley Bassman, the fixed-income veteran who created the MOVE index (the bond market's fear gauge), had been "advocating strongly for the Fed to hike 50. One and done, get it done," and thinks Warsh settled for 25 to buy unanimity: "to get his 12–0 vote today, he had to basically swallow hard and do 25. And he probably wanted to do 50… he should have wanted to do 50 and get done with" (Macro Voices, Sep 17).

But Bassman's real point is that the number barely matters: "we know that… it's not going to matter if they go 25, 50, or even 100. What's going on… is we have a lack of trust in the government, in a lot of our institutions, and maybe about the Fed." In his telling the whole exercise is Warsh trying to wean the market off Fed hand-holding: "get us back to the good old days where the market actually assessed risk," which he compares to quitting a hard habit "cold turkey." He also made the important legal point that the Supreme Court recently carved the Fed out of the president's power to fire officials at will, precisely "because the Fed is too special… basically it's the governor on the world's reserve currency."

The long end is a hyperscaler problem now

The most striking structural argument this week is that the thing pushing long-term US yields up, and by extension pressuring the dollar's whole backdrop, isn't really the Fed or even the deficit alone. It's the AI build-out.

Bassman put numbers on it: the hyperscalers are on a path to borrow "$750 [billion]," at a time when "the Treasury is issuing $2 [trillion]. We're getting close to… 30%, 35% competition for money. The Fed can't stop this. There's nothing they could do… because these guys are going to borrow money at any rate. Six, eight, 10, 12. It doesn't matter. They're in an existential race" (Macro Voices, Sep 17). He added a second, quieter reason the Fed's hikes bite less than they used to: private-credit and other non-bank lenders are "disintermediating the banking system," so "it just reduces the ability of the Fed to transmit their policy."

Jens Nordvig, who ran FX strategy at Goldman and Nomura and now heads Exante Data, made the same point from the market's plumbing. The giant tech firms are going "from being the biggest cash-generating companies in history… to being the largest debtor companies in history," and their bond issuance is "a nonlinear thing" that will be "dramatically more than this year" in 2027. His memorable image: the bull market might one day end "when finally somebody said no to Amazon in the bond market" (The Compound and Friends, Sep 11).

The dollar is "leaking"

Nordvig's broader FX call is the most important dollar-specific analysis of the week, so it's worth sitting with. His thesis is that the currency is quietly slipping for reasons the usual models can't fully explain. Build "a model for… the standard things that drive the dollar, short-end rates, risk sentiment," and lately "there's some little residual… that is leaking in a weaker direction." He ties it to the bond market: "you can start to see some kind of correspondence between when the 30-year US started to wobble and the dollar started to leak" (The Compound and Friends, Sep 11).

Under the hood, he says, markets have started sorting currencies by debt: "if you do a basket of who has not a lot of debt and a lot of debt, it's starting to really favor the ones who don't have": Switzerland, Singapore, Australia. The uncomfortable twist for Americans: rank the top 30 economies by debt metrics and "guess who has the worst… Japan and US. It's actually the United States now. Japan used to be the worst." The dollar is "more resilient than everything else" because it's still the reserve currency, "but it's not trading fantastically well now."

He also gave the sharpest account yet of what Treasury Secretary Scott Bessent is actually doing, both the bond buybacks at home and the yen intervention abroad. Bessent's swagger, in Nordvig's retelling: "I am the house now… you can bet against me if you want." The logic of the July yen intervention, Nordvig explains, was that Bessent was confident he could "orchestrate that the hike would come at the next meeting," and indeed a BOJ hike that was "priced by three or four basis points" is now "more than 90 percent probability." The deeper tension he flags is the one that should worry dollar bulls: "the administration is willing to endorse currency weakness and even actively pursue it while we have inflation problems at the same time. Those two things don't seem to go together." Japan, he notes, "had to sell… 94 billion dollars worth of treasuries" to fund its own defense of the yen, the kind of forced selling that pushes US yields up.

The monetarist in the chair

For a completely different lens on the dollar, economist Steve Hanke of Johns Hopkins argued Warsh is fundamentally "a monetarist," someone who watches the money supply above all. His plumbing metaphor: think of money as water in a tub. Right now "the water going in is going in at 7.9% per year growth rate. You want to slow that down, turn the faucets down just a little bit and have it go in at about 6% per year." Because he thinks rate hikes are "a very fuzzy and ineffective way to slow down the money supply," Hanke expects the Fed to keep pulling that lever: "a greater chance of going up than the market thinks" (The David Lin Report, Sep 17).

Hanke also gave the cleanest one-line answer to why the Fed's move ripples through every other currency: "The Fed influences everybody else… because the U.S. dollar is the international currency. The U.S. stock market and U.S. bond market are the largest and most liquid in the world by a long, long way." And he aired a revealing exchange from Bessent's congressional testimony, where a Democrat pressed him on the buybacks: the ten-year had gone from 4.8% when Bessent started to "a 20-year high of 5.04%," yet Bessent called the program a success, pointing to "the two most successful treasury auctions that we've had in 20 years" and "the best performing bond market in the developed world." Whether that's spin or substance, it's the administration insisting it still has a handle on the long end, the exact thing this week's dissenters doubt.

Fund manager Axel Merk of Merk Investments framed Warsh's project as pulling the Fed back from the market's edge: the chair wants to change "the balance of the market interaction versus the Fed," to stop being "a referee" with a "thumb on the scale" (Thoughtful Money with Adam Taggart, Sep 17). Merk (who says he "lobbied for Kevin to become Fed chair," so weigh the enthusiasm) thinks Warsh was chosen because he "believes in the productivity boom," the idea that if AI lifts productivity, rates can eventually come down. Merk's dollar-relevant number: real ten-year yields "at 2.69%… That's huge," a level he thinks "there's a very good chance they're coming down from," which, if he's right, would eventually take pressure off risk assets and ease the dollar back down.

Positioning: the yen shorts got squared

For anyone watching the crowd, the futures data delivered a genuine shift. Saxo's Ole Hansen and John Hardy flagged "an absolutely titanic turnaround" in dollar/yen positioning: "like a 100,000 contract shift away from yen shorts, those positions getting squared… the overall position is almost flat now, finally." Hardy: "I'm slightly positive for the yen now." Euro bets moved the other way: "euro longs have been very heavily reduced" (Saxo Market Call, Sep 14). In plain terms: the long-running, one-sided bet against the yen has been cleaned out, which removes some of the fuel for a violent yen squeeze, and matches the fresh dollar/yen selling Saxo saw the morning after the Fed.

Around the world: England holds, Japan decides today

The dollar's direction this week is as much about everyone else's central bank as the Fed's. The Bank of England "announced six to three to hold rates at 3.75%" on Thursday, with the real story, as Saxo noted, being the UK budget that doesn't land until the end of October (The David Lin Report, Sep 17; Saxo Market Call, Sep 17).

The bigger lever is the Bank of Japan, which decides today. Two cautions came through the podcasts. Hardy's expectation: the BOJ "will modulate its message relative to where dollar/yen is trading. So I wouldn't expect them to surprise [hawkish]… after this FOMC hawkish blast." And Hanke pushed back on the popular idea that a Japanese hike, on its own, unwinds the carry trade: "not really, because you have to look at what's going on with other interest rates in the world… The Fed increased interest rates. So the yen actually got a little bit weaker as a result of that": if Japan hikes a quarter point too, "nothing has changed relative to the U.S." (The David Lin Report, Sep 17). (As of this writing the podcasts had not yet captured the BOJ's actual decision or the yen's reaction, that's today's live event.)

The midterm math

Under all of it sits the political clock. J.P. Morgan Asset Management's Mira Pandit walked through the November 3rd midterms with colleague Gabriela Santos, and the market-relevant part is the fiscal one. Her base case is a divided outcome ("a Republican controlled Senate, but potentially a Democratic controlled House") with redistricting alone possibly handing Republicans "five to 10 seats." Either way, she argues, "you probably have limited room… for deficit expansion over the next two years" (Insights Now, Sep 17). (Both are sell-side strategists.)

The number that ties this back to the dollar and the bond market: the US is running a deficit "at a resting rate of 6% to 7%… as a share of GDP" ("war-time deficits with an expansionary economy") and now that "the service costs have gone up," she says, that's "become a much bigger issue for the bond market… that rise in the longer end of the curve." In other words, the long-end pressure that's been "leaking" into the dollar is, in part, the market pricing a government spending more than it can comfortably borrow, no matter who wins in November.

The Debate

Where the podcasts genuinely disagreed this week.

Did the hike actually work, or is it already fading? The whole ballgame. The optimists point to a dollar back above 100, a long end that steadied, and stocks at new highs, proof the Fed rebuilt credibility (Market Maker, Sep 17). The skeptics point to the same tape a day later: dollar/yen back below 156, the ten-year back under 5%, fresh dollar shorts going on (Saxo Market Call, Sep 17). The referee is whether the DXY can hold 100 into next week.

Was it a masterstroke or a policy mistake? Same facts, opposite verdicts. Bassman wishes he'd hiked 50 and calls unanimity a win (Macro Voices, Sep 17); Rosenberg calls it "a policy mistake" and is raising cash (RiskReversal Pod, Sep 17); DiMartino Booth says calling policy "not restrictive" is "ludicrous" (Coin Stories with Natalie Brunell, Sep 17). The split is really about whether today's inflation is a supply shock (don't tighten) or a credibility problem (tighten).

Can anyone still steer the long end? The dollar's real question. Bessent insists his buybacks are working and auctions are strong (The David Lin Report, Sep 17). Bassman and Nordvig say the pressure is coming from somewhere no central bank controls: a wall of hyperscaler bond issuance colliding with record Treasury supply (Macro Voices, Sep 17; The Compound and Friends, Sep 11).

Does the administration even want a strong dollar? A contradiction nobody has resolved. Warsh's hawkishness and defiance are dollar-supportive; but Nordvig points out the White House is "willing to endorse currency weakness and even actively pursue it" against Asian currencies to help manufacturing, "while we have inflation problems at the same time" (The Compound and Friends, Sep 11). Two arms of policy pulling the dollar in opposite directions.

The Trades in Play

These are speakers' own stated positions and views, not advice. Operators and insiders are flagged; treat openly-interested sources accordingly.

  • Raise cash. David Rosenberg lifted cash 10% last week and plans to "double up" on the view the Fed is making a policy mistake (RiskReversal Pod, Sep 17). (Economist/strategist.)
  • Lean long yen. Saxo's John Hardy turned "slightly positive for the yen" after the crowded short got squared, and saw fresh dollar/yen selling into the BOJ (Saxo Market Call, Sep 14; Saxo Market Call, Sep 17). (Broker strategist.)
  • Favor low-debt currencies. Jens Nordvig: being long Switzerland, Singapore and Australia, the low-debt currencies, "you've done very well," as the dollar "leaks" (The Compound and Friends, Sep 11). (FX strategist, Exante Data.)
  • Own gold as the fiscal hedge. Axel Merk holds precious metals against "the long-term fiscal situation" and a possible AI-bust-driven Fed reversal, with gold "holding up around $4,200, $4,300" even as real yields sit at 2.69% (Thoughtful Money with Adam Taggart, Sep 17). (Fund manager; disclosed he backed Warsh's appointment.)
  • Position for more hikes than priced. Steve Hanke expects the Fed to keep lifting rates because money-supply growth (7.9%) is still too fast: "a greater chance of going up than the market thinks" (The David Lin Report, Sep 17). (Academic economist.)

Read-Throughs

  • The dollar rose the "right" way, and then started to prove it couldn't hold it. A hawkish, independent Fed gave the dollar a legitimate reason to rally, but the next-day fade (dollar/yen back below 156, ten-year back under 5%) says the market isn't yet convinced one hike changes the trend. Watch whether the DXY can defend 100.
  • Warsh's defiance is still the strongest thing under the dollar, but it's now being tested by his own critics, not just Trump. The chair passed the independence test; the new risk is the "policy mistake" camp (Rosenberg, DiMartino Booth) being proven right by a weakening economy, which would force a humiliating reversal.
  • The long end has quietly become an AI story. If Bassman and Nordvig are right that hyperscaler borrowing is crowding the Treasury market, then the biggest driver of the dollar's backdrop, long-term yields, is one no central bank can hike its way out of. The tell to watch, in Nordvig's words, is the day "somebody said no to Amazon in the bond market."
  • Positioning has de-risked the yen trade. With the crowded yen short squared off, a BOJ that merely meets expectations today is unlikely to trigger fireworks, but it also means less of a coiled spring to snap the dollar lower.
  • Japan is today's swing factor. A BOJ hike delivered without hawkish drama keeps the yen's slow grind higher orderly and takes a little pressure off dollar/yen; a surprise in either direction is the one thing that could break the dollar out of the range it's been stuck in for 18 months.

What Changed This Week

  • The hawkish hike started to unwind within a day: the ten-year fell back below 5%, the two-year's spike faded, and dollar/yen reversed from 156.30 back below 156 as traders sold the dollar's pop.
  • The dollar index reclaimed 100 for the first time since July, but stayed firmly inside its 18-month range, a bounce, not a breakout.
  • Trump escalated and then retreated, demanding 1% rates before saying he still relies on Warsh and aiming his fire at the rest of the board, while floating new tariffs on Europe.
  • A credible "policy mistake" camp emerged, with Rosenberg and DiMartino Booth arguing the Fed is tightening into a supply shock and a softening labor market.
  • The framing shifted from "the Fed vs. the deficit" to "the Fed vs. the AI build-out," as Bassman and Nordvig located the long-end pressure in hyperscaler bond supply the Fed can't control.
  • The Bank of England held 6–3 at 3.75%, and the Bank of Japan moved to center stage as today's live catalyst for the dollar.