Eased 0.94 to 0.91 and the band widened 0.03 to 0.04 - the first step down since the regime was established, for a reason that sits on the invalidation indicator itself. The invalidation names core PCE below 2.5% for three months; August core PCE came in at 3.0%, three-tenths under consensus, with the three-month annualised rate at 2% and July was revised down to the same 3.0%. Part of that is a methodology change rather than disinflation, but the trend the Committee will read now points toward the threshold rather than away from it. The regime's tempo also slowed: the vice chair said there is no urgency, payrolls rose 29,000 with August revised down, and the October hike went from likely to about one in three, with December priced instead. The mean stays above 0.90 because nothing here is a cut: headline CPI accelerated to 3.7%, ISM manufacturing prices jumped to 77.9, and the long end made 24-year highs - a market pricing the regime as durable while it debates the next step. The band widens because the regime's level and its tempo now point in different directions.

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. Update September 25: the regime extended beyond the chair. Warsh framed the hike as removing a dose of accommodation, an open-ended formulation, and Governor Barr said further policy adjustments are likely needed, with inflation risks up and labour-market risks receded. October hike odds reached 66% and near 70% by September 25, with Goldman and Bank of America adding an October move. The data leaned the same way - a flash composite PMI of 58.4, a five-year high, with input prices at 66.4 and Q2 GDP confirmed at 3.0% - and the long end broke again: the 10Y reached 5.223%, highest since June 2007, the 30Y 5.501%, highest since 2004, and TLT a new cycle low at 79.42. Contrary: the balance-sheet leg of the regime is meeting resistance, Barr among the opponents. Update October 15: the regime held its level and lost its pace. August core PCE printed 3.0% against 3.3% expected, with a methodology update taking about 0.3 points off core and the three-month annualised rate at 2%, July core was revised to 3.0% from 3.3%, Williams said there is no need for urgency, and September payrolls rose only 29,000 with unemployment at 4.2% as August was revised to 133,000 from 162,000. October hike odds fell from about 70% to 35% and near 19% before rebounding to roughly a third on a 3.7% September CPI with core at 2.6%. The long end kept repricing: the 10Y reached about 5.35% and the 30Y about 5.73% on October 7, the highest since 2002, with a 10-year auction at 5.3%, and TLT made a new cycle low of 77.11.