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"The Kevin Warsh Era Has Arrived With A Bang": Wall Street Reacts To Warsh's First FOMC

Zero Rss
1 month 4 weeks ago
"The Kevin Warsh Era Has Arrived With A Bang": Wall Street Reacts To Warsh's First FOMC

Below is a snapshot of several kneejerk reactions from some Wall street economists, strategists and traders:

Anna Wong, head economist at Bloomberg:

“The Kevin Warsh era has arrived with a bang – in the form of a dramatically shortened FOMC policy statement and a dot plot that didn’t contain any dot from the chairman himself. That marks a break from the eras of former chairs Jerome Powell, Janet Yellen, and Ben Bernanke. But the rest of the committee sent an equally strong signal: They want rate hikes. Half of the committee penciled in hikes this year, while the other half anticipates holding rates steady or cutting once. That means Warsh could play a key role in influencing the direction of rates. We no longer expect the FOMC to cut rates by 25 basis points later this year.”

Christopher Hodge, chief US economist at Natixis

"Thinks this is overall a hawkish move -- rates steady, easing biased removed, no dissents. The statement, much shorter than previous statements, concludes with a commitment to delivery price stability….all in all, a hawkish statement... The statement, much shorter than previous statements, concludes with a commitment to delivery price stability…. all in all, a hawkish statement.”"

Kay Haigh, Goldman Sachs Asset Management

"Today’s meeting confirms that the Fed’s recent hawkish shift was not just about higher energy prices. Despite the recent pullback in oil, half of the members of the FOMC expect rate hikes as soon as this year, reflecting strong labor market and inflation data. Our base case remains that the Fed can just about avoid hikes, but the path is narrow and there will be a high premium on the incoming inflation data.”

Ira Jersey, Bloomberg Economics

“The market is focused on the dot plot for now, with half the committee thinking there will be hikes. The bear flattening seems reasonable based on that. Those who looked for a quiet first Warsh FOMC meeting must be disappointed. Warsh’s stamp on the statement seems evident, with language moving closer to the style used before the Global Financial Crisis. The effort to make the Fed less transparent may reduce day-to-day volatility, but it risks larger jumps when the Fed’s reaction function or economic data surprise markets... “We thought Warsh might be diplomatic in taking on his post as Fed chair, and the creation of these task forces allows for shifts in the way the central bank functions, while giving everyone within the building a voice and giving him a means to express his own views while assessing the those of others.””

Brian Jacobsen, chief economic strategist at Annex Wealth Management

“Warsh turned the table over in the Eccles Building with a radical simplification of the Fed’s policy announcement. By doing this, he’s actually inviting more Fed-speak, not less. Now every Fed President will fill the gap left by the punchy policy announcement. This may backfire on Warsh.”

David Wilcox, Bloomberg Economics: 

"The committee reaffirmed its policy of maintaining ample reserves in the banking system. That’s notable, because the statement didn’t have to address it -- and analysts had been thinking one way Warsh could slim down the Fed’s balance sheet would be to revert from ample reserves to scarce reserves,” Wilcox said. “Today’s statement suggests they’re not doing that -- at least not right off the bat.”

Marvin Loh, State Street

“The biggest initial message from Warsh is that the commutations process is changing if we look at the wholesale changes to the policy statement. Bare bones is an understatement and for a market that has become accustomed to extensive Fed communications, we may need to read between the lines more closely with less lines available. We can now wonder how long the presser will last.”

Florian Ielpo, Lombard Odier Investment Managers

“The market moves reflect a repricing of Fed credibility and independence. Inflation is clearly back at the center of the reaction function of the central bank and someone is at its helm. This reinforces a higher-for-longer real rate environment.”

Developing

Tyler Durden Wed, 06/17/2026 - 14:48
Tyler Durden

California Has Gay-Certification Program To Tap Into $633 Million For "LGBT" Businesses

Zero Rss
1 month 4 weeks ago
California Has Gay-Certification Program To Tap Into $633 Million For "LGBT" Businesses

Authored by Christopher F. Rufo & Austen Hufford via City Journal,

Americans are used to handouts for favored groups. Affirmative action in university admissions, corporate “diversity” initiatives, and minority-owned contracting requirements direct opportunities, resources, and contracts to supposedly “oppressed” groups, such as women, Native Americans, blacks, and Hispanics.

In California, state Democrats have embraced another kind of favoritism: contracts for state-certified gay-owned businesses.

The scheme operates through the California Public Utilities Commission (CPUC), which regulates privately owned utility companies. California utilities spent more than $43 billion in 2024 on contractors—fuel suppliers, surveyors, engineers, and others—whose work helps deliver water, gas, electricity, and internet service to California’s 39 million residents.

In 1986, Governor George Deukmejian signed Assembly Bill 3678, which required certain CPUC-regulated utilities to submit annual “plans” for buying goods and services from woman- and minority-owned companies. Two years later, CPUC created its “Supplier Diversity Program,” which would enforce the law and set contracting “goals” for large utilities.

Under a series of Democratic governors, the program has expanded to include gay-owned businesses. In September 2014, then-Governor Jerry Brown signed legislation requiring CPUC to recognize “LGBT-owned businesses” as eligible for supplier-diversity benefits. Five years later, Governor Gavin Newsom expanded the program further, “encouraging” other companies involved in the energy sector to award contracts to gay-owned firms.

In the years that followed, CPUC faced activist pressure as it implemented the gay expansion. BuildOUT California, a since-rebranded LGBT building-industry organization, sent a letter to the commission arguing that “homophobia” existed within “the ranks of the utility companies.” The state’s legislative LGBTQ caucus suggested in a 2021 letter that even considering lower gay-procurement targets was “an insult to the LGBTQ+ community.”

By 2022, CPUC had fully implemented the expansion. In practice, this meant establishing a “goal” for utility companies with annual revenues exceeding $25 million to buy things from state-certified LGBT businesses: 0.5 percent of procurement in 2022; 1 percent in 2023; and 1.5 percent in 2024 and beyond. If “large” CPUC-regulated utilities met these “goals” in 2024, they would have sent roughly $633 million to LGBT-owned firms.

This scheme raises an obvious question: How does a business qualify as officially gay? Paperwork. Supplier Clearinghouse, a group that certifies firms for the CPUC program, features a list of qualifications linked on its website. Applicants can secure certification by providing a letter from an “LGBT organization” attesting to their sexual preferences; proof that a newspaper identified them as “LGBT”; or three letters from “personal contacts” written “on company letterhead” attesting to their homosexual orientation. Corporate officials who “falsely represent” their business as gay face up to a year in county jail.

Supplier Clearinghouse also accepts gay-certification letters from the National LGBTQ+ & Allied Chamber of Commerce. The chamber has its own list of accepted documents, including human resources complaints or police records claiming LGBT discrimination. As NGLCC states on its website, “Certification is a journey, not a destination.”

Mary Ann Horton has experienced this “journey” firsthand. Horton, an early internet pioneer credited with helping develop the e-mail attachment, is a white male who “transitioned” and is now married to a woman. Horton’s company, Red Ace, is registered in California as a woman- and LGBT-owned business.

The application process, Horton told City Journal, required “a mess of documentation.” To prove that Red Ace was “lesbian-owned,” Horton sent Supplier Clearinghouse a domestic-partner affidavit. To establish that the business was woman-owned, Horton submitted a birth certificate, which had been reissued in Washington State post-“transition.” To prove transgender status, Horton filed a “therapist carry-letter,” a document from a medical professional certifying transgender identity.

These designations came with perks. After Red Ace secured these labels, Horton said, San Diego Gas & Electric brought the company on as a part-time cybersecurity contractor. During the hiring process, Horton told us, a company official said that being on the diversity list made the contract much easier to secure.

“If I was a straight, white male, I might be concerned I don’t have the same opportunity,” Horton said. “It worked out great for me.”

LGBT-owned companies in California play other roles. In 2022, SDG&E spent $8.6 million, or 0.36 percent of procurement, on LGBT businesses, apparently including one that produced a training video on supplier diversity. “Never fear when your Ambassador for Excellence is here,” an animated character says in the video. “I can show you exactly how to source diverse vendors.” Other certified LGBT businesses in California include a sign-language interpreter, a kombucha maker, and a “coaching” firm whose services include a “series” to help people “manage” their feelings about “[t]he latest election cycle.”

In California, preferential public contracting is technically illegal. In 1996, voters approved Proposition 209, which banned the state from granting preferential treatment based on race, sex, or ethnicity in public employment, education, and contracting. More than two decades later, in 2020, they rejected an effort to repeal the ban.

CPUC’s arm-twisting regulations violate the spirit of the law. The commission lists several specific “goals” for utilities’ contracting rates: 15 percent to minority-owned firms; 5 percent to women-owned firms; 1.5 percent to disabled-veteran-owned firms; and, most recently, 1.5 percent to LGBT-owned firms. It claims that these goals are not a “requirement” or “quota.” In practice, however, the agency cajoles utilities into compliance by requiring them to collect extensive demographic data, submit detailed annual reports, list their plans for increasing procurement from favored groups, and explain “any circumstances that may have resulted in not meeting” their procurement “goals.”

Despite the commission’s efforts, however, utilities and businesses don’t seem interested in LGBT certification. Large utilities’ procurement with LGBT-owned businesses decreased by 5 percent in 2024. Supplier Clearinghouse lists 3,750 Minority Business Enterprises, but only 451 LGBT-certified firms.

CPUC did not respond to our request for comment by deadline.

The state imposed these rules based on the view that government spending should not merely purchase goods and services, but should also engineer social outcomes. Under this framework, buying a hammer from a firm owned by a black transgender lesbian has more social value than buying the same hammer from a firm owned by a straight white man.

But Californians don’t need an energy system delivered by gay contractors; they need an energy system that works. Utility regulators should be in the business of regulating utilities, not verifying contractors’ sexual preferences. Companies should award contracts based on competence, quality, and cost—not the sexuality of the business owners.

Tyler Durden Wed, 06/17/2026 - 14:45
Tyler Durden

Watch Live: Kevin Warsh's First Press Conference As Fed Chair

Zero Rss
1 month 4 weeks ago
Watch Live: Kevin Warsh's First Press Conference As Fed Chair

Warsh's first press conference as Fed Chair is likely to be the most important event risk of the meeting.

With The Fed leaving rates unchanged as practically 100% expected (with no dissents), and a very hawkish signal sent from the 'Dots', the question on everyone's lips is simple: "What Will Warsh Do?" (WWWD?)

Will he shift to a cautiously hawkish path citing a resilient labor market, higher growth and soaring inflation...

...or will he reiterate the current easing bias as support for the lower leg of the 'K-shaped' economy (and what President Trump wants), looking through inflation fears (as the Iran MoU offered him a gift)?

A dovish Warsh would be the surprise with the market more than fully-pricing-in one rate-hike this year:

From a regime-change perspective, he is also expected to drop forward guidance on future Fed actions, even going so far as dropping the 'Dots' (and has been vocal about the size of the Fed balance sheet), which could raise uncertainty and this push bond vol higher.

Amid all of this Bloomberg's Michael Ball says that, from a trading perspective, the curve-flattening case is straightforward: firm growth and sticky inflation keep Fed hiking risks alive at the front end, while fading energy-tail risks and a more independent-looking Warsh should reduce term premium farther out.

A centrist, inflation-conscious Warsh is enough to flatten the curve further.

Reporters will be asking about: a 'missing dot', a drastically more hawkish 'dots', a dramatically-shortened statement, and a clear hawkish bias (seemingly more focus on the inflation side of the maNdate more than employment).

Watch Kevin Warsh's first press conference live here (due to start at 1430ET):

Tyler Durden Wed, 06/17/2026 - 14:25
Tyler Durden

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