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A Brief Fed Tenure, a Lasting Prompt: Miran Paves the Way for Warsh’s Agenda
11 days ago•Source: CNBC
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Fed Finds Steady U.S. Household Finances in 2025 Amid Softening Job Market and AI Uptake
The Federal Reserve Board’s Economic Well-Being of U.S. Households in 2025, based on the SHED survey from Oct. 2025, shows overall financial well-being holding steady near 2024 levels (73% report being okay or comfortable; 63% could cover a $400 emergency), with persistent price concerns (price increases remain a top worry, major concern down to 53%). The labor market appears solid but softer than last year (42% worry about finding/keeping a job; 8% quit; 7% laid off). AI adoption in the workplace is rising—about one in four workers used generative AI in the prior month, with 81% saying it saves time and could boost careers. The full report, data, and visuals are available from the Fed."
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Waller urges system-wide modernization of Federal Reserve operations
Governor Christopher J. Waller argues for modernizing Fed operations by centralizing non-local functions (IT, HR, finance, procurement, vendor management, payments, and IT) under System leadership while preserving district-based roles important for monetary policy input, supervision, and local economic outreach. He outlines two models: (1) standardization with centralized System leadership that preserves Reserve Bank footprints, and (2) a more centralized, potentially outsourced design with consolidated facilities. The shift aims to cut costs, reduce risk, improve cybersecurity, and attract national talent, leveraging AI where appropriate. It requires delegating operational decisions from 12-way consensus to System leaders. While decentralization is a strength, this plan argues for standardizing what can be standardized to strengthen the Fed’s efficiency and resilience without erasing necessary regional distinctions. Some Reserve Banks could see job reductions as the footprint changes, but the goal is a more integrated, scalable Federal Reserve.”,
Solvency, Not Runs, Drives Most Bank Failures
A long-run study across 160 years of U.S. banking shows insolvency is usually the root cause of bank failures, with runs acting mainly as triggers for already insolvent banks. Deposit insurance reduced runs but did not eliminate failures, so policy should emphasize higher bank capital, stronger supervision, and selective liquidity support to panicking banks. Strong banks survive runs via interbank lending, signalings of confidence, and temporary suspension of convertibility. In short, mitigating solvency problems and recapitalizing when needed are key to preventing costly crises.
Iran Conflict Sparks Europe’s Inflation Spike, Tightening ECB Dilemma
Eurozone inflation rose in March as energy costs surge due to the Iran conflict, putting the ECB in a bind between raising rates to curb inflation and avoiding further pressure from higher energy prices, while governments weigh subsidy support and voters push for protection.
Oil shock could erase gains from bigger tax refunds, economists warn
Stanford economists warn that higher oil and gasoline costs could largely offset the extra tax refunds Americans are set to receive this year. In a scenario where crude prices spike (with disruption to the Strait of Hormuz) but retreat later, U.S. households could spend about $740 more on gas this year, roughly canceling out the projected $360–$748 in additional refunds from last year’s tax changes. The result is a net drag on spending growth and inflation, with big variation by household — non-drivers and EV owners face less pain while long commuters face higher costs — making the outlook uncertain and tempering the hoped-for fiscal tailwind.
Indonesia Faces Fuel Spike as Iran War Disrupts Middle East Supply Ahead of Eid
A Persian Gulf conflict is disrupting energy supplies and driving fuel-price spikes in Indonesia just as Eid Al-Fitr travel surges are set to peak. Jakarta insists the country is well-supplied and will not raise prices before Eid, but analysts warn the disruption could fuel inflation and raise subsidy costs for a government already under fiscal strain, highlighting Indonesia’s limited refining capacity and status as a net importer.
Energy shock from Iran conflict risks stalling global recovery
A potential Iran conflict could trigger a sustained energy-price shock that would lift global inflation and slow growth, with IMF warning of about 0.4 percentage points higher inflation and 0.1-0.2% slower world growth, affecting the UK, euro area, and US and shaping central-bank policy.
December inflation ticks up again, keeping Fed wary of slow cooling
U.S. inflation accelerated in December as the Commerce Department’s PCE price index rose 0.4% for the month and 2.9% from a year earlier, the fastest yearly rise since March 2024. Core PCE also climbed 0.4% MoM and 3.0% YoY. Yet spending rose 0.4% and while gas prices fell, electricity and natural gas costs rose. The Federal Reserve left rates around 3.6%, with officials wanting inflation closer to 2% before considering rate cuts.
Can US dynamism outpace its rising debt?
A Danish pension fund sold its US government bonds over concerns about Washington’s overspending, highlighting a core tension: American financial dominance currently rests on sustained corporate vigor and fiscal discipline. If US dynamism wanes amidst rising deficits, its edge in global markets could erode even as the country remains the benchmark today.
Trump’s Greenland tariffs: a minor nuisance for Europe unless tensions escalate
European firms have already absorbed and rerouted around US tariffs, and the proposed 10% levy on several European countries for Greenland troop deployments would be a nuisance rather than a major hit, provided the dispute does not widen into a broader trade war; escalation remains the key factor that could alter the impact.
Trump’s Reluctance Reconfigures Hassett Fed Chair Prospects
President Donald Trump signaled reluctance to nominate Kevin Hassett as Fed chair, saying he’d rather keep Hassett in his current White House role, a stance that could reshape the race to succeed Powell and boost former Fed Governor Kevin Warsh; analysts say the comments complicate a Senate-confirmation process already strained by a DOJ probe into the Fed, while markets moved on the news as the administration weighs candidates who can win confirmation and align with Trump’s policy goals.