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The first Federal Reserve rate increase since 2023 arrived as an open break from both the extended monetary pause and President Trump's political orbit.
Chair Kevin Warsh signaled the central bank's intent without ambiguity: "inflation is too high and has been for too long." The Fed added that it is prepared to act further. Warsh's language does the structural work here.
Framing inflation as a sustained condition, not a spike, sets up the conditions for continued tightening rather than a corrective one-off.
The one-period question markets typically focus on is secondary to the signal the chair chose to send: the pause is over, the direction is established. The word "defies" is not accidental.
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