Wednesday Wisdom 6/17
Midweek reads full of fun facts to contemplate on inflation hawks, task forces, and AI economics
Hello Readers,
Happy Fed Day! Chair Warsh wrapped up his first meeting with a dry press conference and keen focus on price stability. The committee is hawkish, forward guidance is gone, and I’ll get into more in Big News.
Big News
In a terse statement, the Federal Reserve Open Market Committee (FOMC) left its benchmark federal funds rate unchanged, in the 3.50-3.75 percent range.
Chair Warsh is making changes. The four-paragraph statement did not include forward guidance, and Warsh did not submit a federal funds forecast to the FOMC dot plot. Half of the 18 committee members who submitted a ‘dot’ expect at least one rate hike in 2026.
The Summary of Economic Projections (SEP) shows an elevated outlook for the federal funds rate and inflation versus March. The median federal funds rate projection implies a hike this year and one 25 basis point cut per year in 2027 and 2028. Inflation is expected to end the year above 3 percent, then quickly retreat to target in 2028.
Chair Warsh used the press conference to announce the creation of five task forces to “ask hard questions, examine current practice, consider alternatives, and ultimately propose next steps for policy-maker consideration.” The five task forces will address:
The form and function of Fed communications,
Benefits and risks of ample balance sheet reserves as well as balance sheet composition,
Reliance on existing data sources, evaluation of new resources, and methodological changes to improve data-gathering,
The economic impact and implications for Fed policy of new general-purpose technologies, including AI, and
Inflation frameworks.
These task forces are still being formed, but according to Warsh, are expected to include “the best minds, both the best thinking inside of the Federal Reserve, and the best people I know in business and economics, and the academy, and technology.”
So what? The hawks are running the show. Rates will go up until inflation comes down. Commercial real estate needs to stop expecting lower rates. Seriously.
CRED iQ calculated a zero spread between the weighted average cap rate and commercial mortgage rates of $26 billion1 in debt issued this year. Zero. The weighted average was driven down by negative leverage for industrial, multifamily, mixed-use, self-storage, and manufactured housing loans, while other sectors recorded positive leverage. What could possibly go wrong?
Related Fun Facts Reads:
Reads Around the Web
A Trump push to cut ‘statistical noise’ could mean less data from the Census Bureau, by Hansi Lo Wang, NPR, June 12, 2026: “The order by the Commerce Department, which oversees the bureau, bans ‘noise infusion.’ It’s one of the main privacy protection techniques the bureau has used for decades… new policy, which also applies to the Bureau of Economic Analysis, leaves both statistical agencies with two options going forward: releasing ‘coarsened’ statistics with fewer details or not releasing some statistics at all… a bureau employee who asked NPR not to name them… ‘From our perspective right now, if this policy stays in effect, it’s the end of a lot of our data production.’”
Companies are scrambling to curtail soaring AI costs, The Economist, June 14, 2026: “Token-heavy applications, such as reasoning models and agents, are growing more popular. In some cases agents build their own agents, sending costs higher still… overall spending has risen 13-fold in the past year… the 1% of clients that spend the most on AI per employee are racking up bills of about $7,450 per person per month… That compares with just $11 for the median… big spenders’ AI bills are low compared with the cost of hiring a developer in San Francisco, they are high compared with employing one in Delhi.”
All the Ways Europe Is Ditching American Technology, by Matt Burgres, WIRED, June 8, 2026: ”…timeline shows how dozens of governments, companies, and other organizations across Europe are moving, or planning to shift, away from US Big Tech… Last week, the European Commission launched its official long-term plans to rely less on US technology… European Parliament has switched the default search engine on its devices from Google to the French alternative Qwant… Dutch government is moving its code away from Microsoft-owned Github to its own repository… Finland reportedly decided not to move its election data to Amazon’s cloud services… Belgium’s .be top-level domain has said it will move away from AWS.” (timeline)
“Anthropic has branded itself as the AI company with humanity in mind, drawing red lines with the Pentagon over using its AI for mass surveillance and autonomous weapons… But Claude was already used to abduct the leader of Venezuela and send missiles to targets in Iran.” — Joe Hagan, “Dario Amodei has a Cold,” Vanity Fair, Spring 2026
Reads on Substack
“Anthropic, the one company that spent the last year telling Washington it needed more power to police AI for the wellbeing of humanity, just got a live demonstration of what that power looks like when this administration is the one holding it.”
“The viewpoints from Fed officials reflected in the SEP are a window into the debates around the FOMC table.”
“…we are living in the midst of a reenactment of the decline and fall of the Roman Republic... a key factor was the emergence of extreme inequality.”
One Last Thing…
“Jump up, hold on tight; Can't trust the promise or a guarantee.”
Sara’s Fun Facts Schedule
🦉 6/24 Wednesday Wisdom: Inflation and Retail Sales
🦉 7/1 Wednesday Wisdom: America’s Birthday 🥳
☀️ 7/8 Sunshine Corner 7/2026 (no Wednesday Wisdom)
🦉 7/15 Wednesday Wisdom: June Jobs and Prices
“The most revolutionary thing one can do is always to proclaim loudly what is happening.” — Rosa Luxemburg
Cheers! - Sara 🦉
Includes CMBS conduit, single-asset/single-borrower, Freddie Mac, and CRE CLO transactions.