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Warsh ends Fed forward guidance era

Wednesday, June 24, 2026 · from 5 podcasts
What Bitcoin DidPeter St Onge PodcastForward GuidanceBitcoin AndThe Economist
  • Kevin Warsh’s Fed killed forward guidance, ending 15 years of predictable policy.
  • AI-driven capital flows are abandoning Bitcoin, now seen as a non-productive asset.
  • $9T in U.S. debt rollover looms, forcing a Fed choice: print or collapse.

The Federal Reserve has entered a new regime. Kevin Warsh, in his first meeting as Chair, held rates steady at 3.5-3.75% but scrapped forward guidance, the dot plot, and years of verbose signaling. The move, described by The Economist’s Archie Hall as a 'deliberate shield' against political pressure, marks a decisive break from the Bernanke-Powell era of telegraphed policy.

Tyler Neville on Forward Guidance argues the shift ends the Fed’s role as a 'volatility stifler.' Markets now face genuine uncertainty, forcing private capital to resume real price discovery. Felix Jauvin notes the dot plot is now a tool for dissent, not forecasting. Warsh’s silence isn’t indecision - it’s strategy: by offering no roadmap, he removes the crutch that systematic investors relied on for a decade.

"The era of the volatility stifler is over."

- Tyler Neville, Forward Guidance

The pivot is already reshaping capital flows. With AI infrastructure delivering tangible productivity gains, investors are rotating out of non-yielding assets. Bitcoin, once the 'no alternative' insurance play, now faces high opportunity cost. As David Bennett noted on Bitcoin And, the price dropped below $64,000 post-announcement, reflecting a broader market reassessment.

But the real pressure isn’t just ideological - it’s arithmetic. Lawrence Lepard on What Bitcoin Did warns of a $9 trillion debt wall over the next 12 months. At current rates, interest alone consumes $1.3 trillion annually - more than defense. If the bond market balks, the Fed must either monetize the debt or trigger a crisis. Lepard calls the Fed’s current toughness 'kabuki theater,' a political pose before inevitable capitulation.

"The Fed is a machine for creating money that must eventually trigger double-digit inflation."

- Lawrence Lepard, What Bitcoin Did

Peter St Onge adds that Japan’s liquidation of $47 billion in Treasuries to defend the yen has worsened the funding gap. With the U.S. deficit running at 7% of GDP in peacetime, and spending $2 for every $1 collected, the system is on a war footing without a war. Warsh’s tactical opacity may buy time, but the math remains unforgiving.

#Fed#Inflation#Markets#Regulation#Macro
MicroStrategyFederal ReserveJapan

Source Intelligence

- Deep dive into what was said in the episodes

What Bitcoin Did
What Bitcoin Did

Danny Knowles

The Fed Is Trapped: Why Double-Digit Inflation Is Inevitable | Lawrence Lepard • Jun 22

  • Lawrence Lepard argues the Federal Reserve operates as a 'con man' institution tasked with gaslighting the public into believing money is sound while systematically inflating the currency. He sees the Fed's committee deliberations and forecasts as kabuki theater.
  • Lepard predicts this decade will be one of inflation, starting in 2020. He forecasts double-digit inflation as inevitable, noting the U.S. nearly reached 9% previously.
  • He notes Kevin Warsh's first Fed meeting abandoned forward guidance, opting for Greenspan-esque ambiguity. Lepard interprets this as political positioning to avoid appearing subservient to Trump, while setting up dovish cuts later using committees.
  • Lepard's 'big print' thesis hinges on unsustainable debt growth. He cites a chart showing debt growing faster than GDP, requiring more M2 creation to support nominal GDP.
  • Warsh signaled willingness to shrink the Fed balance sheet only in 'normal conditions,' leaving an exception for a 'break glass' crisis. Lepard links this to Hank Paulson's recent warning about debt becoming a problem requiring emergency measures.
  • Lepard monitors the U.S. 10-year Treasury yield, Japanese 10-year yield, and the yen as key stress signals for a potential leveraged unwind that could trigger a 'correlation of one' crisis and necessitate massive Fed intervention.
  • Lepard points to an unsustainable U.S. interest expense of $1.3 trillion annually and about $9 trillion of short-term debt rolling over within 12 months, making low rates politically attractive to reduce government borrowing costs.
  • Lepard defends Michael Saylor's strategy as a 'financial arbitrage' borrowing at ~11.5% to invest in Bitcoin with ~30% ARR, capturing the spread. He compares it to Hugo Stennis's Weimar Germany play.
  • He argues MicroStrategy's STRETCH security decline to $83 reflects a leveraged cascade or liquidation, not fundamental failure. Lepard views Saylor's evolution and leverage as a necessary 'speculative attack on the dollar' within the existing fiat system.
  • Lepard models MicroStrategy stock as an ~5-8x potential return if Bitcoin rises from $60k to $180k, due to NAV premium dynamics. He notes past cycles show decreasing drawdowns and upside multiples as adoption broadens.
  • Lepard identifies AI as the current economic driver, with ~$600B trending to $1T in annual capex, but questions capital allocation correctness and sees parallels to the dot-com bubble's overvaluation and leverage.
Also from this episode: (4)

Macro (1)

  • He states the monetary system fails when widespread recognition that printing cannot stop triggers currency abandonment. Lepard argues the U.S. is closer to this point post-2008 and post-2020 crises.

Protocol (3)

  • Current Bitcoin sentiment is at its worst ever, Lepard argues, driven by internal infighting among Bitcoiners and a lack of a clear external catalyst like FTX, unlike past cycles.
  • He frames Bitcoin's current ~50% drawdown from ~$126k as mild compared to past 80-90% declines, attributing this resilience to institutional adoption creating a strong bid floor.
  • He warns against excessive leverage in Bitcoin, advocating self-custody as the core protective strategy, with leveraged plays like MicroStrategy reserved for a small portion of capital.
#Fed#Macro#Inflation#BTC Markets
Peter St Onge Podcast
Peter St Onge Podcast

Ep 177 Weekly Roundup: Will the Fed Panic on Inflation? • Jun 22

  • Peter St Onge reports May inflation at 0.5% monthly, over 6% annualized, bringing the yearly rate to 4.2% and marking the highest inflation since the Biden administration began.
  • Peter St Onge identifies energy as the sole driver of current inflation, with oil at $90/barrel, down from $111 in March but higher than $65 pre-war and $57 in December. Groceries rose 0.1%, and non-core inflation was 0.2%.
  • Peter St Onge contends a Federal Reserve panic and subsequent rate hikes, not high oil prices, will trigger a recession by increasing borrowing costs and reducing investment. He suggests policy reforms could drop prices by 20%.
  • Peter St Onge states Washington spends $2 for every $1 collected, with May seeing $628 billion spent against $335 billion collected, resulting in a $293 billion monthly deficit, annualized at $3.5 trillion.
  • Peter St Onge notes the current 7% of GDP deficit is unprecedented during low unemployment and high stock markets, historically only seen during total wars like WWII. He warns a typical recession would add another 6% to the deficit.
  • Peter St Onge argues the end of the gold standard by FDR and Nixon removed borrowing limits, leading to unchecked spending, with social spending still $2 trillion above pre-COVID levels, even accounting for inflation.
  • Peter St Onge dismisses economic growth as a solution to the deficit, asserting that 8-10% annual growth, a "China-level" rate, would be necessary, far exceeding current forecasts of under half that through 2030.
  • Peter St Onge warns that unaddressed deficit spending will lead to a bond market crisis with double-digit yields, freezing the economy and crashing Wall Street and pensions. He predicts the Fed would then convert this into inflation, benefiting hard asset holders.
Also from this episode: (9)

Markets (3)

  • Peter St Onge reports Japan spent $100 billion failing to defend the yen, selling $47 billion in US Treasuries in March. Japan holds over $1 trillion in US debt, while the US needs to refinance $12 trillion in federal debt within 12 months.
  • Peter St Onge explains Japan's three decades of near-zero interest rates fostered an economy of "malinvestment," leading to one in six Japanese companies being "zombies" unable to cover interest payments.
  • The yen crashed from 103 to 160 per dollar after the Federal Reserve's rate hikes created a 5.5-point interest rate gap, prompting hedge funds to sell up to $4 trillion in yen to buy higher-yielding US Treasuries. Japan could not raise rates due to its "zombie" economy.

Labor (4)

  • Peter St Onge reports the Department of Justice ended "disparate impact" rules, allowing job competency tests previously suppressed by DEI interpretations of the 1971 Griggs Supreme Court decision.
  • Peter St Onge argues the effective ban on job tests led colleges to sell $150,000 degrees as the only legally safe "IQ test," causing enrollment to double and revenue to jump 14 times. White college completion is 72% vs. 28% for blacks.
  • Peter St Onge reports women received 94% of jobs created last year, accounting for 369,000 positions, while men gained only 21,000. Since 2016, 2 million men have exited the labor force as female participation remained unchanged.
  • Peter St Onge attributes declining male employment to explosive growth in female-dominated fields like healthcare and hospitality, which accounted for 99% of payroll growth, coupled with state-sponsored DEI discrimination.

Psychology (1)

  • Peter St Onge highlights severe consequences for men, including suicide rates at a Great Depression high, three-quarters of alcohol deaths, and being four times more likely to be homeless or commit suicide.

Society (1)

  • Peter St Onge notes societal pressures on men, with 60% of male college students afraid to speak freely and 90% of mainstream media articles framing men as problematic. Women initiate 65% of divorces, and men lose custody in 85% of cases.
#Fed#Macro#Markets#Labor#Regulation
Forward Guidance
Forward Guidance

A New Era Is Beginning In Markets | Weekly Roundup • Jun 19

  • The Fed under Kevin Warsh sharply reduced forward guidance, cutting the FOMC statement by 80% and ending with a succinct commitment to price stability, signaling a break from 15 years of communication aimed at suppressing volatility.
  • Markets interpreted the Fed's June meeting as peak hawkishness, pricing in two hikes by mid-2027, but many of those hawkish dots likely came from non-voting regional presidents pushing back against Warsh's new, less communicative approach.
  • Warsh's hawkish pivot collides with disinflationary data: oil is down 30% since the last Fed dot plot, inflation swaps have returned to pre-war levels, and shelter inflation appears to be peaking, making actual rate hikes unlikely.
  • The flattening yield curve suggests a growth problem, not just an inflation issue, and may be part of a Warsh-Treasury strategy to lower long-term yields to facilitate government debt term-outs and improve housing affordability.
  • Record short positioning in SOFR futures and across the Treasury curve creates a potential squeeze, as the market consensus for hikes faces off against weakening inflation data and a cooling labor market.
  • Gold sentiment has reversed violently, with six-month put/call skew at a 10-year high and CTA positioning collapsing to the 1st percentile, showing how government intervention in markets creates extreme sentiment swings across all asset classes.
Also from this episode: (5)

Markets (2)

  • High-yield credit spreads remain resilient despite tightening financial conditions, allowing the AI-driven capex cycle to continue unabated, with data center spending growth slowing from 80% to 45% year-over-year but remaining massive.
  • Capital is rotating out of hyperscalers and into AI bottleneck stocks and infrastructure plays, a trend Quinn identified early, as the buildout shifts from being cash-flow funded to requiring significant debt and equity issuance.

BTC Markets (2)

  • MicroStrategy's distress stems from Saylor's refusal to build cash reserves for dividends and debt, instead levering up to buy more Bitcoin, creating a self-reinforcing downward spiral as Bitcoin price falls and equity issuance dilutes shareholders.
  • Bitcoin's narrative struggles in a new era where capital has productive alternatives like AI infrastructure, breaking the TINA dynamic that drove its previous bull cycles and highlighting its role as an insurance asset against future currency dilution.

Regulation (1)

  • The crypto industry faces a cleanup phase where scams and misallocated capital from 2022 must be cleared before legitimate projects - like simplified banking rails - can emerge, a process dependent on regulatory clarity and improved traditional market liquidity.
#Fed#Macro#AI Infrastructure#BTC Markets#Markets
Bitcoin And | Bitcoin & Economic News
Bitcoin And | Bitcoin & Economic News

Oman's Mining | Bitcoin News • Jun 18

  • The Fed held interest rates steady but new chair Kevin Walsh signaled a pivot toward tighter policy, dropping language suggesting rate cuts and raising the 2026 rate projection to 3.8%.
  • Bitcoin's price dropped below $64,000 after the Fed's hawkish shift, with a market cap of $1.27 trillion and 20,044,351.14 BTC in circulation.
Also from this episode: (7)

Protocol (2)

  • Oman launched a mandatory national Bitcoin mining pool, Omanhash.om, requiring all licensed miners to join. The state-backed pool consolidates hash rate for government visibility into mining revenue and energy use.
  • Energix Global built Omanhash.om and operates Kazakhstan's BTCpool.kz. The company now manages 25 EH/s across three sovereign mining pools.

Regulation (2)

  • ECB President Christine Lagarde reportedly directly intervened to stall Binance's MiCA license application in Greece, which had nearly cleared regulatory requirements.
  • Binance CEO Richard Tang said customer funds remain safe and the exchange is committed to operating under a compliant EU framework, with updates expected before the July 1 MiCA deadline.

AI Infrastructure (1)

  • France's cybersecurity agency ANSI will stop certifying security products lacking quantum-resistant encryption in 2027, advising companies to buy only quantum-safe products by 2030.

Corruption (1)

  • Michelle Bond, wife of former FTX executive Ryan Salame, faces four campaign finance charges for allegedly using FTX funds for her congressional run. Each charge carries a maximum five-year prison sentence.

Agents (1)

  • Estonia approved a proposal to give AI agents their own government-issued digital IDs, specifying limited authorizations for actions like viewing records or making payments up to a fixed amount.
#Fed#Macro#Mining#Regulation#Inflation
The Intelligence from The Economist
The Intelligence from The Economist

First rate: Kevin Warsh’s Fed debut • Jun 18

  • Fed Chair Kevin Warsh held his first rate meeting and maintained the Fed funds rate at 3.5 to 3.75%, aligning with market expectations and the current economic data.
  • Warsh advocates for a minimalist Fed communication style, rejecting forward guidance and the dot plot to avoid distorting markets. He believes central bankers should focus solely on setting rates.
  • Warsh launched five task forces to review the Fed's remit, including its balance sheet and data sources, signaling a planned institutional reform rather than immediate, drastic changes.
  • Current U.S. inflation is above the Fed's 2% target but not catastrophic, driven by the Iran war, AI investment, fiscal stimulus, and a hot economy. The path forward depends on whether inflation recedes or firms up.
  • Listeners shared workplace hacks like 'Atwood's Duck' - a deliberate, minor error for a manager to find and remove - with equivalents in construction ('leaving something for the inspector'), the navy ('Admiral's potato'), and advertising ('the hairy arm').
Also from this episode: (4)

Politics (4)

  • German far-left party Die Linke surged from near-extinction at 3% polls to 11% after a viral Bundestag speech and effective door-knocking, now rivaling the governing Social Democrats.
  • Die Linke's base has radically shifted from older East Germans to a younger, more western electorate, refocusing its platform on cost-of-living and housing issues to avoid internal divisions.
  • The party faces a strategic dilemma between being a protest movement and wielding power, as the AfD's strength forces potential state-level coalitions between Die Linke and their detested rivals, the CDU.
  • In Berlin, Die Linke has a chance to lead a left-wing city government for the first time, a prospect exciting the party as it plans a summer of protests against the CDU-led federal government's welfare cuts.
#Fed#Macro#Europe#Inflation#Society

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