🔴FOMC Statement: Warsh (06/2026) vs Powell (04/2026), the Fed's language has changed

Both meetings kept interest rates at 3.50%-3.75% but the Fed's policy stance has shifted:
1. Economic description: The Fed has started mentioning productivity factors
- April: "economic activity has been expanding at a solid pace. Job gains have remained low." Federal Reserve
- June: "Economic activity is expanding at a solid pace... Productivity growth and capital investment are strong. Job gains have kept pace with the workforce."
-> Reflecting Warsh's view: AI and investment are raising the "speed limit without causing inflation" of the U.S. economy (meaning helping the U.S. economy grow faster without inflation like traditional sectors).
2. Inflation perception: from "energy prices" to "supply shocks"
- April: "Inflation is elevated, in part reflecting the recent increase in global energy prices." Federal Reserve
- June: "Inflation remains elevated... in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability."
-> The Fed states that inflation is no longer just about oil prices but has expanded to "supply shocks" more broadly. The Fed commits to "will deliver price stability" (bringing prices back to stability), quite different from the language of "seeks to achieve" used during Powell's time.
3. Easing bias has completely disappeared
In April: "The Committee is attentive to the risks to both sides of its dual mandate." This sentence was opposed by three members (Hammack, Kashkari, Logan) because it still implied a leaning towards easing.
-> Under Warsh, the Fed has removed this sentence, no longer balancing risks on both sides as Powell did.
Warsh: The statement is short, omitting policy expectations, with a personalized commitment to price stability, linking growth with productivity -> actions speak louder than words. With absolute consensus, reaffirming the Fed's credibility with the market.