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Monday, April 20, 2026

Latest Morning Briefing

Debating Warsh

Kevin Warsh, the probable next Fed chair, wants to lower the federal funds rate sooner rather than later. Few FOMC members agree with him. Ed and Elias don’t either. Today, they explain why Warsh’s case for lower rates is fundamentally flawed. It rests on the economic dogma that, because the labor share of National Income is declining amid an AI-fueled productivity boom, the theoretical neutral federal funds rate, R*, is also declining. On the contrary, explain Ed and Elias, the productivity boom raises R* for reasons unique to the current economic backdrop. That leaves little room for the aggressive rate cuts Warsh envisions without risking speculative bubbles and a financial crisis. Also, the Bond Vigilantes would probably resist Fed easing, as they have since 2024. … Ed reviews “Anniversary” (++).

Commodities

Global

IMF, World Bank meetings show limits in mitigating shocks, reliance on US for solutionsReuters

Central banks

In Fed Fight, Trump Faces the Senator With Nothing to LoseWall Street Journal
Kevin Warsh Fed Hearings Will Be Treasury Bonds’ Next CatalystBloomberg

Credit

Will Private Credit Cause a Financial Crisis? Probably NotBloomberg
How private credit's cracks are threatening to deepen private equity's woesCNBC
Private Credit Is on the Hunt for Credit-Card DebtWall Street Journal

US

Larry Fink’s take on the Middle East crisis is at odds with doom-and-gloom mainstream mediaNY Post
America Is in the Middle of a Stealth Manufacturing BoomWall Street Journal
Are College Graduates Finally Catching a Break in This Job Market?Wall Street Journal
How Are Consumers Still Spending So Much?
Wealth-Tax Fever Is Spreading to Less-Wealthy StatesWall Street Journal

Europe

Germany Is Reinventing Itself as a Weapons FactoryWall Street Journal
Orban’s Defeat in Hungary's Election Reveals Populism’s Achilles HeelBloomberg

Industries & companies

Airlines:American Airlines down after dismissing United megamergerCNBC
Energy:Big Oil Plows Billions Into Far-Flung Drilling Sites to Escape Iran TurmoilWall Street Journal
Tech:Intel Is Making Progress. But It Isn’t Out of the Woods Yet.Wall Street Journal

Geopolitics

Corporate finance

USA Rare Earth to buy Brazil's Serra Verde for $2.8 billionCNBC

AI

Anthropic's Mythos Adds Strain on Cybersecurity Teams Facing AI ThreatsBloomberg

Beyond markets