TMAD Flow: Fed is No Longer Leading
$MSFT $META $SPX
Hi everyone,
Please make sure you’re all on www.tmad.app It’s life saving because you can see what names to stay away and what indexes momentum and flow is doing.
Now, let’s discuss what happened today regarding FOMC.
Today’s FOMC under Chair Warsh sent a clear signal: the Fed is no longer leading. It is following.
Warsh has made market prices a primary input for policy guidance, arguing that financial markets deliver the most valuable real-time information when they respond directly to data rather than Fed forecasts. He has repeatedly stressed the need to observe “direct and unfiltered” market reactions and has welcomed the sharp rise in yields since the last meeting as markets “playing the ball, not the referee.” He has also criticized traditional data dependence, noting problems with lagging official statistics and the “data and the dependence” itself, while pushing for better real-time sources.
That approach carries an inherent limit. Markets are noisy, incomplete, and imperfect signals. If the FOMC is deliberately orienting around them, its own actions become less predictable and less reliable by design. Warsh’s own framing essentially concedes the point.
The recent yield spike looks far more like a reaction to the renewed Iran conflict and energy-price risks than a clean verdict on domestic growth, investment, or the broader economy. Warsh treats the move as the market “already speaking.” If that is the case, the Committee may be reading the wrong message.
Recent soft CPI and PPI prints (June headline CPI down 0.4% month-over-month, PPI down 0.3%) underscore the tension. A framework that downplays conventional economic data while elevating market prices leaves open questions about how those numbers are weighted.
The market may be falling or repricing, but not necessarily for the reasons Warsh attributes. It may simply be registering that the FOMC has shifted from leader to follower and market does not like it.
