The Federal Reserve under new Chair Kevin Warsh just held its first meeting, and the message was unmistakable: inflation control comes first. The FOMC kept the federal funds rate pinned at 3.50%-3.75% during its June 16-17 gathering, a decision that caught even seasoned bond market veterans off guard with its hawkish tone.
Bob Michele, JPMorgan Asset Management’s Global Head of Fixed Income, described the committee as carrying a “hawkish tilt” driven by persistent inflation pressures.
A new sheriff with an old playbook
Warsh’s appointment to succeed Jerome Powell came with a well-known backstory. He previously served at the Fed from 2006 to 2011, a period that included navigating the global financial crisis. His reputation from that era was clear: inflation discipline first, accommodative policy second.
Michele had actually been reading the tea leaves before Warsh’s first meeting. He pointed to unusual dissents among FOMC policymakers at the April 2026 meeting as an early warning sign. In his view, those dissents were critical signals about where the committee was heading under new leadership, essentially telegraphing that the inflation hawks were gaining altitude.
