A More Opaque Fed, AI’s Strange Bedfellows, and “Less Screaming. More Streaming!” 7/1/26

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**Kelly Evans** (0:58)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. Stocks are mostly up today, but those parts of the AI trade are getting hit really hard. Corning, CoreWeave, the chip stocks all under pressure. The momentum trade is having its worst relative day since 2020, according to BTIG. Welcome to The Exchange. I'm Kelly Evans. Our market guest today isn't waiting any longer. He's getting defensive. He'll explain why in a moment. Plus, we'll hear from Sebastian Mallaby this hour. He sees troubling signs for open AI whose IPO may be delayed into 2027 But let's start with the first public comments from new Fed Chair Kevin Warsh following his first Fed meeting a few weeks ago. The chair firmly reiterated the need for all central banks to get inflation down, and that's about as forthcoming as he was in his messaging.

**Kevin Warsh** (1:50)
On the broad conduct of policy at my press conference, I said, I'm not going to give forward guidance because we're meeting in six weeks, but I have an update for you. We're meeting in four weeks.

**Sarah** (2:01)
Helpful. So is July on the table for rate hike?

**Kevin Warsh** (2:05)
So Sarah is trying to get me to break this rule. She's going to fail.

**Kelly Evans** (2:13)
But we have to try. Joining me in our opening exchange, the New Century Advisors, Chief Economist, Claudia Somm, and Brookings Institution Senior Fellow, David Wessel. It's great to see you both again. We were just in DC together a couple of weeks ago for that first meeting, Claudia, which a lot of people interpreted as quote unquote hawkish. And look, Warsh did reiterate, again, in other parts of that discussion, he said getting inflation down is our number one job. So we're hearing that messaging once again as well.

**Claudia Somm** (2:43)
Yeah, absolutely. The message is coming across loud and clear, but no plan. We haven't, you know, real inflation hawk at this point with inflation of 4% would be talking about rate hikes. Kevin Warsh is not talking about rate hikes. He also isn't talking about, well, is this inflation? Is it temporary? He was asked that. He really didn't answer the question.

**Kelly Evans** (3:02)
Do you think he needs to? Should he answer the question? What do you think his goal and approach is going? By the way, I think it was Bank of America, Claudia, today, who pointed out, the last two weeks have been pretty quiet on the Fed speak front, quieter than usual for similar other periods. They say, maybe it's the holiday, or maybe this really is going to be a different Fed.

**Claudia Somm** (3:21)
So Kevin Warsh is absolutely doubling down on his pulling back of communication. And I do think you've seen the Fed has been quieter in general, not silent, right? We have gotten more commentary from other Fed officials, but not the kind of crescendo that we often have coming out of Fed meetings.
You know, he has a principle, he has a plan, he wants to pull back on information. I'm skeptical that this is going to end well, and I think for accountability's sake, they should at least be explaining why they've held interest rates, how they're thinking about the data, not necessarily for guidance, not necessarily future policy, but he's really cut back on the amount of information that he's willing to share.

**Kelly Evans** (3:59)
Right. David, what are your thoughts? And he was up there with other central bankers. I would say for the most part, he did kind of play the part. He didn't go out of his way to differ. He was actually very collegial in his approach and kind of teasing with them and being very playful. And he also said, look, we all need to work in concert to really get inflation down.