The Fed’s new vibe: confidence
Kevin Warsh came out swinging on Tuesday, telling Congress he’s determined to defeat inflation and get monetary policy “right.” In other words, the central bank isn’t trying to do the usual dance of sounding hawkish enough to scare inflation but not so hawkish it spooks markets.
AI gets a rare shoutout
Warsh also leaned into the upside side of the story, saying the economy is in solid shape and could get a meaningful boost from the current wave of artificial intelligence investment. That’s notable because it frames AI not just as a stock-market theme, but as a real economic engine.
Why investors should care
If the Fed can keep inflation under control without kneecapping growth, that’s the sweet spot stocks love:
- lower odds of a nasty policy surprise
- better odds the AI capex boom keeps humming
- less pressure on risk assets from rates staying scary for too long
Big picture: the Fed’s message here is basically “we see the fire, and we still think the house is standing.” Markets tend to like that kind of confidence — especially when AI is still throwing gasoline on the growth story.