#federal-reserve-bank-of-new-york

#federal-reserve-bank-of-new-york

The most senior officials from the US Federal Reserve, the European Central Bank, and the Bank of England are expected to take part in a desktop stress test to respond to another Lehman Brothers-style collapse.

"That's a dangerous thing," he said Thursday during an interview with Bloomberg TV, describing a scenario where demand and prices for Treasuries fall as foreign interest in the market declines.

The New York Fed's Survey of Consumer Expectations indicated that one-year inflation expectations rose to 3% in March, with gas price expectations jumping to 9%, the highest since March 2022.

The dominant force in play remains the Middle East conflict, which has kept oil prices elevated and inflation expectations firm. Reports that Washington is assembling a coalition to escort vessels through the Strait of Hormuz could offer some relief for the oil market and could weigh on the dollar.

September, or more likely October, is now the realistic opportunity for a rate cut, and even that is far from guaranteed. The data coming through is not consistent with easing in July. In fact, it points in the opposite direction. Inflation is not falling fast enough. The latest wholesale inflation data shows prices rising at 3.4% year-on-year, the strongest pace in a year, and core measures are still running close to 4%.

Warsh served on the Fed's Board of Governors from 2006 to 2011, making him the youngest person ever appointed to that role at age 35. During the 2008 financial crisis, he was part of Ben Bernanke's inner circle and served as an intermediary with Wall Street. He negotiated survival plans for firms like Morgan Stanley (NYSE:MS). He later resigned from the Fed due to disagreements over its balance sheet expansion policies.