Tidbits, Federal Reserve, Brazil’s Export, Cattle Inventory 1/31/26
- Wright team
- 13 minutes ago
- 4 min read
Tidbits
President Trump nominated Kevin Warsh to succeed Fed Chair Powell in May. Warsh is a lawyer and distinguished visiting fellow in economics at Stanford University's Hoover Institution. Warsh has said he believes the president is right to press the Fed for steep rate cuts and has criticized the central bank for underestimating the inflation-busting potential of productivity growth supercharged by artificial intelligence.
He has also called for a broad overhaul, a "regime change" in his words, of the Federal Reserve that would slim its balance sheet and ease bank regulations.
The Labor Department reported yesterday morning inflation at the wholesale level for the U.S. economy was up 0.5% in December after a 0.2% gain in November. The market was expecting a 0.2% increase in wholesale prices. For all of 2025, wholesale inflation was up 3.0%, 1% more than the Federal Reserve’s target of 2%.
Because the Federal Reserve tries to control inflation by adjusting interest rates, interest rates in the secondary markets immediately jumped higher. That and the uncertainty of what the newly nominated Fed Chairman means when he talks about “regime change” at the Federal Reserve, and precious metals, commodities, and the stock market indexes dropped sharply. Interestingly, wheat was the last commodity still holding a daily gain yesterday, but it also eventually traded lower. Most commodities recovered nicely from their lows, but most did close lower.
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