Stepped 0.89 to 0.93 and the band tightened 0.04 to 0.03 - the largest confidence move in this refresh and the most justified: the thesis named a hike bias that would be acted on, and it was. A unanimous 25bp hike to 3.75-4.00%, the first since July 2023, a dot plot with one more hike this year, twelve of eighteen at 4.125%, four above, and no cut until 2028, and a chair who says inflation has been too high for too long and that conditions are not restrictive are the durable-regime claim confirmed in the strongest form available. The market's own repricing into the meeting - 92% odds, a 5.00% ten-year close, the first since 2007, a 5.367% thirty-year - means this is not one meeting's tone but a path the curve has accepted. The band stops at 0.03 rather than tighter for two honest reasons: core CPI at 2.4% is a full point below the headline, so the hike is into an energy shock rather than broad inflation, and the long end rallied four basis points on the decision - the first sign that some of the market reads a delivered hike as bringing the end of the cycle nearer. A dovish pivot at the October meeting remains the contrary evidence, and today made it less likely.

Kevin Warsh used his first FOMC (June 16-17 2026) to establish an explicitly hawkish, price-stability-first regime, succeeding the dovish-tilt uncertainty that the retired Fed leadership transition policy uncertainty thesis tracked. The Committee held the target range at 3.50-3.75% on a unanimous 12-0 vote but dropped its easing bias, sharply shortened the statement, and published a dot plot that removed the prior 2026 cut and put a HIKE on the table - nine of eighteen participants see at least one hike this year, six see multiple, only one sees a cut. Warsh withheld his own dot, said "inflation is a choice", and committed the Committee to delivering price stability, deliberately devaluing forward guidance and reorienting the Fed around inflation. The market priced it immediately - the 2-year yield jumped ~16bp on the statement, the 10Y rose to ~4.49% and the 30Y to ~4.93%, and equities posted the worst new-chair Fed-day reaction since 1994. The thesis is that this is a DURABLE regime, not a one-meeting tone: higher-for-longer policy with a live hike bias and no 2026 cut, a steeper-than-priced rate path, and a Fed that tolerates above-target growth and energy inflation rather than easing into it. Update July 2: Warsh reinforced the regime - at the Sintra forum July 1 he emphasized Fed independence, rebuffed calls for cuts, and pledged to deliver price stability, warning against tolerance of above-2% inflation - and markets now price ~66% odds of a December hike in the Fed's own dots, with core PCE at 3.4% validating higher-for-longer. Update September 3: the Jackson Hole keynote resolved hawkish. Warsh said inflation is too high, signalled rates may have to rise, named PCE as the gauge he will act on, and said the better summer prints do not show underlying improvement, and called broad financial conditions not restrictive against a strengthened economy at 4.1% unemployment. September hike odds went 35.4% to 57.5% in a session and on to roughly two-thirds by September 1, with the 10-year at 4.81%, its highest since October 2023, and the 30-year at 5.26%. Update September 10: the long end repriced through a direct attempt to cap it. Treasury tripled its long-dated buyback to $6B, three times the $2B communicated, to stem rising borrowing costs - and in the same session the 30-year rose five basis points through 5.3% to 5.307% while the 10-year hit 4.85%, its highest since October 2023, with TLT down to 81.00. August payrolls at +162,000 against +53,000 expected and 55,000 of upward revisions removed the labour-softness case for holding, taking September hike odds to 60.6%. The one contrary datapoint is core PPI at +0.2% against +0.3% expected, which keeps a dovish hold live into the September 16 decision. Update September 16: the tell fired. The FOMC raised the target range 25bp to 3.75-4.00% on a 12-0 vote, the first hike since July 2023, the dots show one more hike in 2026 with twelve of eighteen at 4.125% and no cut before 2028, and Warsh said inflation is too high and has been for too long and that financial conditions are not restrictive. The market led: August CPI 3.4%, hike odds 92% by September 14, the 10Y closed 5.00% on September 15, highest since 2007, the 30Y 5.367%, TLT 80.71, and retail sales +1.2% the morning of the decision. Contrary: core CPI 2.4%, the long end rallied 4bp on the hike, and equities sold the press conference.