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The Federal Reserve and Chairman Kevin Warsh on Wednesday followed the script on interest rates closely. View More

In this articleUS2YFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO1:4001:40Warsh's first FOMC as chairmanNews Videos The Federal Reserve and Chairman Kevin Warsh on Wednesday followed the script on interest rates closely, voting to keep the benchmark level steady, but dropped several surprises that kept markets guessing about where things are heading. Markets didn't like it, with major averages swooning after the meeting and as Warsh spoke in his news conference.Here are the five biggest takeaways:No rate changes, but the hawks are circling: There were no apparent dissents to keep the federal funds rate targeted between 3.5%-3.75%. However, the "dot plot" of expectations further out showed an inclination towards a hike later this year. The Federal Open Market Committee split 9-9 between those expecting steady rates or one cut and those seeing at least one hike, with the median "dot" pointing to a quarter percentage point increase.The dot mystery solved: There was rampant speculation heading into the meeting that Warsh wouldn't be submitting a dot, and he confirmed that he did not. In the past, the chairman has expressed a disdain for all such "forward guidance" as hamstringing future policy. "It's been the practice of this committee for participants to submit these projections, and I have encouraged my colleagues to continue to do so. I, however, have refrained from offering any projections of my own consistent with my long-held views on the SEP, at least as currently structured," he said.Regime change via task force: Warsh has been promising to shake things up at the Fed, and his first steps in doing so came through the announced formation of five task forces. They are charged with studying communication, the Fed's balance sheet, the data sources on which it relies, productivity and jobs, the impact of artificial intelligence and other transformative technologies, and the central bank's inflation approach.Tough on inflation: On about a dozen occasions, Warsh used the term "price stability." For a chairman who had opined often about cutting rates, it was surprisingly hawkish talk about his and the committee's "unambiguous and unanimous" resolve to get inflation under control. Markets responded in kind, with the policy-sensitive 2-year Treasury yield soaring by 14.4 basis points.Brevity is the soul of wit, and monetary policy: Warsh also promised to revamp communications, and the first visible step was a dramatically abridged post-meeting statement. Prior to the new chairman's arrival, the statements generally ran in excess of 300 words, consisting of boiler plate language that investors parsed through closely. This time: The statement ran just 130 words, short and sweet with little ambiguity. They said it "Today we believe that the Federal Reserve's FOMC ushered in a new era of monetary policy in the United States." — Rick Rieder, head of fixed income at BlackRock."New Fed Chair Warsh sounded a bit like old hawkish Fed governor Warsh at his press conference today repeating multiple times the need for the Fed to deliver on its mandate for price stability," — Krishna Guha, head of central bank strategy and economics at Evercore ISI."The [task force] announcements signal an institution in active review rather than steady state, and investors should expect the operating framework of the Fed to look meaningfully different over Warsh's tenure than it did under his predecessor." — Jason Pride, chief of investment strategy at Glenmede."Warsh wants his first impression to be as 'the reformer.' We'll see what that means later this year. In terms of the policy outlook, Fed watching just got harder." — Dario Perkins, managing director of global macro at TS Lombard. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The Federal Reserve on Wednesday released its interest rate decision. View More

watch nowVIDEO3:2503:25Federal Reserve leaves rates unanimously votes to leave rates unchangedPower Lunch WASHINGTON – Kevin Warsh's first meeting as Federal Reserve chairman concluded Wednesday with no change in interest rates and a nod to possible hikes ahead. The meeting also saw the removal of key language indicating a bias toward future cuts within a dramatically shorter policy statement.The Federal Open Market Committee voted unanimously to keep its benchmark overnight borrowing rate anchored in a range of 3.5%-3.75%. The federal funds rate has held there since the central bank lowered rates by three-quarters of a percentage point in the latter part of 2025.With a bevy of intrigue over Warsh taking the central bank helm, the meeting followed the same pattern as the others this year regarding rates but differed otherwise. (function(){function e(){window.addEventListener(`message`,function(e){if(e.data[`datawrapper-height`]!==void 0){var t=document.querySelectorAll(`iframe`);for(var n in e.data[`datawrapper-height`])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data[`datawrapper-height`][n]+`px`;i.style.height=a}}})}e()})(); A missing dot Fed officials, through their closely watched "dot plot" grid, removed their prior outlook for a rate cut this year and indicated that a hike is possible. However, the Summary of Economic Projections missed the participation of one member: Warsh.Warsh has been a critic of the forecasting tool as well as other forward guidance out of the committee including projections on unemployment, inflation and gross domestic product in the SEP. Heading into the meeting, Fed watchers had suspected Warsh wouldn't submit his outlook, and some anticipated he might look to end the feature altogether. He confirmed at a news conference following the decision that he had declined to share a forecast and is forming task forces to overhaul major Fed operations. "I did not submit a dot for me," Warsh said. "It's not helpful in the conduct of policy. I suspect by year-end, as I mentioned in my opening statements, there'll be a review about communication broadly, press conferences, dots, meetings, and the like, transcripts, minutes. This will be part of that. I don't want to prejudge the outcomes there, but I'm pretty open-minded about what they could be."Based on the 18 of 19 possible responses, the median estimate for the fed funds rate at the end 2026 is now 3.8%, up from 3.4% in the prior projections from March and signaling the committee sees at least one rate hike as necessary this year. Meeting participants were split on the path for rates this year, with eight expecting no change, one seeing a cut and nine anticipating at least one hike. An additional dot was missing for 2028 projections. A shorter statement During the news conference, Warsh acknowledged the changes to the committee's statement. "It's a bit shorter, a bit simpler and it dispenses with some older language," he said. "That statement just gives you the facts, as best we can judge it."In addition to the rate call, which was widely anticipated in financial markets, the FOMC's post-meeting statement also not only removed prior language seen as a nod toward an easing slant in the future but took a hatchet to the rest of it. Warsh has criticized the Fed for overcommunicating.This week's communique checked in at just 130 words, compared with 341 for the April 29 release following the most recent meeting. The statement offered just a brief summary of economic conditions followed by a vow to control inflation."Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong," the statement read. "Job gains have kept pace with the workforce, and the unemployment rate has changed little.""Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability," the policymakers said.The statement also noted that the Fed would maintain its policy of "ample reserves" in the banking system, indicating there are no immediate plans to reduce the central bank's bond holdings on its $6.7 trillion balance sheet, as Warsh has advocated.The statement's unanimous approval came after so-called forward guidance verbiage drew three dissents at the April meeting from presidents of regional reserve banks who wanted to preserve a two-sided option for possible hikes or cuts ahead. Higher inflation forecast In keeping with uncertainty over rates, officials also adjusted their indications of where policy is headed from here. The grid, which anonymously indicates the rate outlook for meeting participants, erased an earlier indication for one cut this year and pushed any reductions into 2027 and 2028 as policymakers weigh the durability of an inflation spike brought on by the Iran war.The grid indicated a median funds rate projection of 3.8% by the end of the year – some 0.16 percentage point above the current level and suggesting that a hike is very much on the table. They continued to expect a long-run funds rate of 3.1%.Officials altered their views on the economy, raising their outlook on inflation for 2026 to 3.6% on headline and 3.3% for core, which excludes food and energy. At the last update in March, committee members anticipated 2.7% rates for both measures. They also slightly lowered their projection for gross domestic product growth to 2.2%, down 0.2 percentage point from March, and cut the unemployment projection to 4.3%, down 0.1 percentage point.The inflation surge has posed a quandary for policymakers who are trained to look past short-term supply shocks such as the energy spike associated with the war.Recent inflation indicators have posted multiyear highs, with the consumer price index for May indicating a 4.2% annual inflation rate, though the core measure that excludes food and energy registered lower than the headline reading at 2.9%. Inflation has been above the Fed's 2% target for the past five years.Warsh told reporters that the Fed is committed to reducing inflation to 2%."The commitment to deliver is strong, unanimous, and unambiguous, and that's I think an important message we've missed for five years, and we're going to fix that," Warsh said. Though he has offered little public commentary outside of his confirmation hearing and his swearing-in on May 22 as chairman, Warsh has argued that supply-shock inflation generally should be looked through when formulating policy. He also has maintained that artificial intelligence ultimately will have a disinflationary impact on the economy as rising productivity will help ease the cost of goods and services.Still, the case for lowering rates has been made more complicated by a surprisingly resilient labor market. Nonfarm payroll growth again defied expectations in May with a gain of 172,000 while the unemployment rate, the Fed's most closely watched metric, was at 4.3%, unchanged over the past year.Ahead of the decision, the market didn't anticipate any cuts in 2026 and a quarter-point hike was expected by the end of the year, according to the CME Group's FedWatch gauge. In the wake of the decision and Warsh's remarks, traders were now anticipating a hike could come as early as October. Correction: In the wake of the decision and Warsh's remarks, traders were now anticipating a hike could come as early as October. An earlier version misstated the expected move. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

A bill the Senate Armed Services Committee approved would prevent defense contractors from buying back their stock without Pentagon approval. View More

Senator Elizabeth Warren, a Democrat from Massachusetts and ranking member of Senate Banking, Housing, and Urban Affairs Committee, left, and Senator Jack Reed, a Democrat from Rhode Island, speak during a confirmation hearing in Washington, DC, US, on Thursday, Oct. 30, 2025. Eric Lee | Bloomberg | Getty Images The Senate Armed Services Committee approved a must-pass bill with a provision that could bar some defense contractors from executing stock buybacks or paying dividends unless they have Defense Department approval. The measure, an annual bill known as the National Defense Authorization Act, was approved 18-9 in a closed-door committee meeting last week. The stock buyback provision's inclusion in the committee's bill greatly increases its chances of becoming law and sets up a potential sea change in how the Pentagon interacts with some of the country's largest businesses. Its bipartisan nature also underscores how Republicans under President Donald Trump have abandoned some of their free-market orthodoxy to join with more interventionist Democrats. The mandate is expected to face fierce blowback from the companies to which it would apply, such as Lockheed Martin, Northrop Grumman and Boeing.Sen. Elizabeth Warren, D-Mass., a committee member, helped secure the measure's inclusion in the committee's bill. In an interview, she said it's intended to "bring a small amount of discipline to these defense contractors who have been running wild for years." "These giant defense contractors buy back their own stock for the sole purpose of plumping up the stock price and improving the pay of the corporate executives," she said. "The restriction in the NDAA says if you're a company that's not even performing on your government contracts, you don't get to do that." The provision in the bill, Section 815, specifically would prohibit the Pentagon from entering into contracts with contractors unless the contractor agrees in writing not to "purchase an equity security of such entity, or any parent entity of such entity, that is listed on a national securities exchange" or "pay dividends or make any other capital distribution with respect to the equity securities of the entity."The provision would take effect June 15, 2027. The defense secretary could agree to waive the limitation if the contractor provides a "qualifying defense investment plan."The Pentagon would be required under the bill to start a review process to find out which contractors are violating the provision by engaging in stock buybacks or paying dividends without a waiver. Waived contractors could also be in violation if they are "underperforming with respect to prioritization, investment, or production."Contractors who are in violation could be whacked with a number of penalties for noncompliance, including suspension of contract payments and loss of eligibility for contracts and competitive grants. Sen. Jack Reed, D-R.I., the ranking member of the Senate Armed Services Committee, said the provision was included in the NDAA on a bipartisan basis. "It was generally bipartisan," he told CNBC. "We establish contractual requirements and when they can't meet them, to then turn around and buy back stock rather than reinvesting in their production facilities and other aspects is wrong."Asked whether he thinks the measure will make it through negotiations in the House, he said he hopes the lower chamber will "appreciate" that "if we sign a contract, we expect that it will be fulfilled."The measure will likely garner a significant amount of Republican support. Earlier this year, Trump signed an executive order barring defense contractors from conducting stock buybacks or paying dividends, making it more difficult for Republicans to oppose it. Sen. Rick Scott, R-Fla., who sits on the committee, offered his support when he spoke with CNBC on Tuesday. U.S. Senator Rick Scott (R-FL) walks on Capitol Hill on the day U.S. Senate Republicans meet to vote on leadership positions, including Senate Majority (Republican) Leader, for the 119th Congress in Washington, U.S., November 13, 2024. Leah Millis | Reuters "If you're making money off the federal government, you shouldn't be giving shareholders a return before we get our stuff done," said Scott, who was previously CEO of a publicly traded health company.A chunk of the text in the NDAA comes from Warren's bill, the "Prioritizing the Warfighter in Defense Contract Act" with Sens. Josh Hawley, R-Mo., and Mike Lee, R-Utah, which would similarly block buybacks and dividend payments. Sen. Tim Sheehy, R-Mont., another member of the Armed Services Committee, responded with a thumbs up when asked about the provision on Tuesday. Sheehy's office didn't respond to a request for comment on the context of his thumbs up or how he feels about the measure.The House of Representatives did not include the stock buyback and dividend provision in its version of the NDAA. Rep. Chris DeLuzio, D-Pa., withdrew an amendment to add it, citing procedural issues when the House Armed Services Committee approved its version of the measure, but it could be included in a later amendment or after final negotiations between the House and Senate. Even so, there is expected to be resistance to the measure, which would be an unusual reach of the federal government into private-sector business practices. The Pentagon does business with tens of thousands of contractors, meaning the implications for business could be widespread. Major trade organizations representing defense contractors have vocally opposed it, warning it would amount to an unprecedented reach into the market by the government. The U.S. Chamber of Commerce wrote a letter to the House of Representatives, saying it "respectfully but firmly opposes any such legislative effort.""Reduced stock price volatility, enhanced market liquidity, lower transaction costs, and greater stability for retail investors during periods of market turbulence are all proven benefits of stock buybacks," the Chamber wrote in the letter. "Legislating restrictions on this practice represents a flawed and unwarranted intrusion into free market mechanisms and would not address the underlying challenges the Executive Order seeks to remedy." Read more CNBC politics coverageFor Warsh as Fed chair, silence may be the pointTrump denies Iran deal claims, decries new drone attackPirro's losses in Fed investigation should stay on the books, judge rulesTrump family got about $500M from crypto venture — but investors saw steep losses The Aerospace Industries Association also opposes the measure. "Capital allocation tools like dividends and buybacks are essential for attracting the private capital that funds innovation, production, and workforce growth across the defense sector," Eric Fanning, the group's President and CEO, said in a statement to CNBC. "Arbitrary restrictions would make the industry less competitive for investment, reducing the flow of capital at a time when policymakers are aiming to expand the industrial base.""Over time, that would shrink the very market policymakers are trying to strengthen — undermining both economic growth and national security. We urge the Senate to reconsider," he said. Fanning is a former secretary of the Army.Warren said she hopes the measure will survive, but noted that knives will be out for it. "It's a very popular provision, but I never kid myself, the lobbyists are coming out of the woodwork to protect the defense industry," she said. "There's never a similar kind of lobbying power to protect the U.S. taxpayer, so we'll see." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The new leader of the Fed left interest rates alone but made clear how he plans to rewire the central bank. View More

In this article.SPXFollow your favorite stocksCREATE FREE ACCOUNT Kevin Warsh, chairman of the US Federal Reserve, during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, June 17, 2026. Al Drago | Bloomberg | Getty Images Chairman Kevin Warsh's 43-odd minutes at the Federal Reserve's podium Wednesday were intended to deliver the message that, slowly but surely, he will set about making the Fed quieter, more humble in its engagement with the markets and the economy, and — ultimately — laser-focused on inflation. "I've said for years inflation is a choice," Warsh told reporters. "You bet it is."Warsh sees his confirmation as Fed chair as a mandate to deliver far-reaching change to the Fed, intended to get the Fed out of the business of allowing inflation to run too hot. At his first press conference, he gave a roadmap to how that change will come about. He also gave some hints as to where he may face the biggest risks.  Read more CNBC politics coverageFor Warsh as Fed chair, silence may be the pointTrump denies Iran deal claims, decries new drone attackPirro's losses in Fed investigation should stay on the books, judge rulesTrump family got about $500M from crypto venture — but investors saw steep losses Warsh's initial changes to the Fed are in some ways modest. The 12 members of the rate-setting Federal Open Market Committee voted unanimously to hold interest rates steady at 3.5-3.75%, just as traders have expected for weeks. But behind the scenes, much is changing — even in the process of how the Fed came about making that core decision. Prior Fed chairs had offered different policy statements for the committee to consider. Warsh changed that."There was one proposal on the table," Warsh said. "The group was unanimous and unambiguous on it." That shift and others show Warsh carefully marshaling his political capital for the bigger alterations he has planned. The bulk of Warsh's prepared remarks at the top of the press conference — and much of the discussion with reporters that followed — was spent detailing a series of task forces. These will deal with communications, the balance sheet, data, productivity and jobs and the Fed's inflation framework, Warsh said. They will pair internal Fed staff with external experts, whom Warsh said he is in the process of selecting. Warsh's task forces have the ring of the classic do-nothing government blue-ribbon commission, but they are central to his theory of change at the Fed. Warsh's authority as Fed chair is largely delegated by the Fed's Board of Governors and the wider FOMC. The task forces are an attempt by Warsh to prompt the Fed's other members to come around to his way of thinking all on their own, with a little helpful guidance from the outside experts he selects. Warsh also pointedly declined to submit an economic forecast to the Fed's Summary of Economic Projections, which includes its famed "dot plot," though he allowed his colleagues to do so because "that's the commitment that the FOMC made." By withholding his own views about where interest rates are headed, Warsh effectively devalues the rest of the Fed's views. Any discussion about the future path of interest rates now has to include the caveat that the Fed's most influential official, the chair, hasn't stated his opinion on the matter. And that saves him the trouble of taking an immediate, difficult vote on how to change communications.That vote instead is deferred until closer to the end of the year, when his communications task force delivers its report, Warsh said. That process may also result in changes to the Fed's practice of releasing transcripts to its meetings, he said, and to the press conference itself. That would have the effect of pulling back even further on how much the public can see into the Fed — beyond what the chair wants to say. Some of that is by design. Warsh declined to discuss the market's sinking reaction to his unfolding comments because, he said, he valued the "unfiltered" market reaction. "What we've given markets is a new chapter for the central bank." The two-year Treasury yield rose 16 basis points following the Fed's statement, suggesting investors believe Warsh will eventually need to raise interest rates. That is a large move for one day, and how investors and the Fed can adjust to a new era of volatility remains to be seen.Another risk for Warsh in this process is that the other members of the Fed simply may not agree to come along for the ride. The Fed is an effective institution in part because of its decentralized power. The Fed's governors serve 14-year terms and are difficult to remove. Its regional bank presidents have a right to speak their own minds. It may be relatively clear in a moment of profound transition for the global economy that the Fed should wait and see if inflation continues to worsen. But if members of the Fed come to believe that, for instance, Warsh is putting too much emphasis on the promise of artificial intelligence and underweighting the risks of energy price increases, they will simply vote him down. Warsh can manage dissent at the Fed but cannot fully contain it. But at least for now, Warsh can assume the voice of the Fed. "This committee will deliver price stability," Warsh pledged. If he can do that, all the other changes he wants may come easily. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The S&P 500 closed down 1.2%, as bond yields rose. View More

The Wednesday afternoon decline in the S & P 500 after Federal Reserve officials signaled possible interest rate hikes to tamp down inflation accelerated into the close. While the Fed opted to keep rates unchanged at the end of Kevin Warsh 's first monetary policy meeting as Fed chairman, it was the so-called dot-plot of what central bankers see for rates and the economy that spooked the markets. The S & P 500 closed down 1.2%, as bond yields rose. The 10-year Treasury yield rose back to nearly 4.5% as nine members of the FOMC thought the fed funds rate would end 2026 higher than the current range of 3.5% to 3.75%. The FOMC, or the Federal Open Market Committee, is the central bank's policymaking committee. There were 18 of 19 possible dots offered, with one member not issuing projections. During his post-meeting news conference, Warsh confirmed that he was the one who "refrained from offering any projections," which was in line with his past commentary about the Fed's need to refrain from forward guidance. Given that the FOMC also upwardly revised its near-term outlook for inflation, Warsh was asked why they didn't opt to increase rates this time around. He shut that line of inquiry down, directing the questioner back to the statement released by the Fed. Markets and investors are wondering whether that interaction signals a shift to a reluctance to improvise and add to the prepared statements. It was Warsh's first time at bat, so we'll have to see. Warsh did explain that while market prices are one of the most important tools the Fed has at its disposal, they are only useful so long as investors are analyzing the economic data for themselves and using it to make their own decisions about whether it is good or bad data. Warsh, who served as a Fed governor from 2006 to 2011, believes that economic data becomes less useful if investors are only trying to game the central bank's interpretation of it. In this way, Warsh is looking to make the market a better, more objective tool that the Fed can use to help its process. Holding rates steady was expected — and as a result, the real test was news conference, with markets looking to see how Warsh balanced the fact that high energy prices have led to a rebound in inflation, with the idea that high rates are causing pain for every day Americans; not to mention the man who nominated him, President Donald Trump , has made it quite clear that he expects to see lower rates under Warsh. During his first news conference, Warsh also announced new independent task forces to review five key areas relating to the Fed and its rate decisions. Fed communications — to improve the form and function of Fed communications, including with the Fed's Summary of Economic Projections (SEP), which contains the dot plot Balance sheet policy — to review the risks and benefits of the current regime and the current composition of the balance sheet Use and reliance on data sources — will evaluate new information sources, and if any changes in the methodology of gathering data are warranted Productivity and jobs — will survey the pace, reach, and economic impact of new general-purpose technologies such as AI Inflation framework — the goal being to better understand the drivers of inflation, and as a result, refine how it is measured Warsh stated that the timeline for updates will vary by task force, though most of the reviews should be finalized by the end of the year. The shared objective of all these task forces is to better equip the Fed to deliver on its dual mandate of maintaining price stability and maximizing employment. With these topics now under review, it will be important to monitor for updates in each of these areas. What we learn from these task forces will be crucial to understanding how the Fed is looking at the economic data we get on a daily, weekly, and monthly basis, and how investors should be looking at it as well. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Gundlach said Warsh's stance reduces the risk of overly accommodative monetary policy that could reignite inflation and push longer-term borrowing costs higher. View More

watch nowVIDEO2:0302:03Jeffrey Gundlach: Kevin Warsh may not be the easy money chairman people thoughtClosing Bell DoubleLine Capital CEO Jeffrey Gundlach said new Federal Reserve Chairman Kevin Warsh struck a more hawkish tone than many investors expected, underscoring his commitment to restoring price stability and signaling less appetite for easy monetary policy."He is absolutely telling you that he plans on delivering on price stability. So that means... we're not going to have such easy money policy as everybody thought maybe Chairman Warsh would do back in the first quarter of this year, when everyone was counting on rate cuts," Gundlach said on CNBC's "Closing Bell."  "He doesn't sound like that today at all."The comments came after the Fed's policy statement declared that "the Committee will deliver price stability," language that echoed a theme Warsh repeatedly returned to during his press conference. He reiterated that the Fed is committed to bringing inflation back down to 2%, a level it hasn't been at for a half decade, a fact he lamented."The commitment to deliver is strong, unanimous, and unambiguous, and that's I think an important message we've missed for five years, and we're going to fix that," Warsh said. The tone was perhaps stiffer on inflation than investors and economists hoped for from President Donald Trump's handpicked nominee for the role. The previous chair, Jerome Powell, faced a barrage of attacks from Trump for keeping rates too high.Warsh also declined to submit an individual interest-rate projection in the central bank's closely watched dot plot and signaled a broader review of the Fed's communications framework.Gundlach said Warsh's emphasis on price stability lowers the risk that the Fed will pursue overly accommodative policies that could reignite inflation. That strengthens the case for owning long-term U.S. Treasuries, he said."I think there's a greater reason to own long-term Treasuries today now that the new sheriff is in town," Gundlach said. "If you're going to get price stability, and if he doesn't deliver on something that can be characterized as price stability, he's basically announced today that he would be considered a failure."The billionaire bond investor said Warsh had effectively staked his credibility on bringing inflation under control, making aggressive rate cuts less likely."So he's got to get that inflation rate down," Gundlach said. "We don't have to worry about the over-easing or overly accommodative rates that would put further pressure on the long bond." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Here’s a look at how the Fed's June interest rate decision may affect your finances. View More

Chairman of the Federal Reserve Kevin Warsh delivers remarks after being sworn in during a ceremony in the East Room of the White House on May 22, 2026, in Washington.Roberto Schmidt | Getty Images The Federal Reserve held interest rates steady Wednesday, concluding the first meeting helmed by new Fed Chairman Kevin Warsh. The decision offered little relief for consumers struggling to keep up with higher gas prices and overall affordability challenges.Although Donald Trump's pick to lead the central bank had previously indicated he may be in favor of lower rates, inflation rose at its fastest pace in three years last month and the jump in energy costs could have longer-term inflationary effects, economists say. That likely contributed to the decision to leave rates unchanged, experts say, and may prompt the central bank to consider raising borrowing costs instead — contrary to what Trump wants."The Fed can no longer claim there is a balance of risks; inflation is the problem," said Certified Financial Planner Stephen Kates, a financial analyst at Bankrate. Read more CNBC personal finance coverageTrump Accounts create a 'legal backdoor' for Roth IRA wealth, tax attorney saysCollege sticker prices top $100,000 at 16 schools — but many students pay lessHow to get SpaceX stock — without buying the IPOSocial Security trust funds may last longer than expected: Wharton analysisCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Persistently elevated rates — and the prospect of higher borrowing costs — could come as another financial blow for households at a time when cost pressures are mounting."It makes buying a house more difficult, revolving credit is now more difficult, owning a car is now more expensive," said Wayne Winegarden, an economist at Pacific Research Institute, a conservative think tank. Although some of these products' rates are fixed and not immediately impacted by Fed moves, "if you are locking in at a higher rate, it's just another way we are making life unaffordable for American families," Winegarden said. How the Fed impacts your wallet The Federal Reserve's benchmark, called the Fed funds rate, sets what banks charge each other for overnight lending, but also has a ripple effect on many consumer borrowing and savings rates.When the Fed raises its benchmark rate, borrowing becomes more expensive for consumers and businesses, which can cool the economy and, in turn, inflation — but the impact of the Fed's actions varies significantly across loan types.Generally, short-term rates, such as credit card rates, are closely tied to the Fed's benchmark. Longer-term rates, such as mortgage rates, are more influenced by Treasury yields and the economy.  Asiavision | E+ | Getty Images For example, most credit cards have a variable rate, so there's a direct connection to the Fed's overnight rate. "Credit card APRs don't tend to change much unless the Fed forces them to, and with no Fed rate cuts likely on the horizon, Americans should expect card APRs to remain high for the foreseeable future," said Matt Schulz, chief credit analyst at LendingTree. The average annual percentage rate for credit cards has held at just under 20% since last year, according to Bankrate. Moon Safari | Istock | Getty Images Savings rates also tend to be correlated with changes in the target federal funds rate. Although holding the Fed's rate unchanged has kept savings yields largely steady, some have started to drift lower. Still, top-yielding online savings accounts can offer above-average returns and currently pay more than 4%, according to Bankrate."If you're seeking a silver lining in these higher rates, look no further than high-yield savings accounts," Schulz said. A for sale sign is posted in front of a home for sale on April 13, 2026, in Pasadena, California.Justin Sullivan | Getty Images By contrast, 15- and 30-year fixed mortgage rates don't directly track the Fed but typically follow the lead of long-term Treasury rates and the economy. As a result, mortgage rates continue to be volatile amid lingering uncertainty over tensions in the Middle East.The average rate for a 30-year, fixed-rate mortgage was 6.54% as of June 16, while the average rate for a 15-year, fixed-rate mortgage was 6.11%, according to Mortgage News Daily. Maskot | Maskot | Getty Images Auto loan rates are fixed for the life of the loan, and market rates are tied to several factors, including the Fed's benchmark. But because financing costs remain elevated, new-car buyers are getting squeezed by more expensive vehicles and higher interest rates, a combination that can force them to choose between higher monthly payments and longer repayment terms. "Until the rate picture shifts, buyers will keep stretching loan terms to make payments affordable, accruing more interest through the life of their terms as an unfortunate byproduct," said Joseph Yoon, consumer insights analyst at Edmunds.With the Fed's benchmark holding steady, the average rate on a five-year loan for a new car is 6.9%, while the average auto loan rate for a used car is 10.4%, according to Edmunds. Marco Vdm | E+ | Getty Images Federal student loan rates are also fixed for the life of the loan, so most borrowers are somewhat shielded from Fed moves. The current interest rate on undergraduate federal student loans made through June 30 is 6.39%, according to the U.S. Department of Education. However, rates will rise for new borrowers in the year ahead based on the last 10-year Treasury note auction in May.Subscribe to CNBC on YouTube. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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U.S. Treasury yields rose on Wednesday after the Fed held interest rates steady during Kevin Warsh's first policy meeting as chairman. View More

In this articleUS30YUS2YUS10YFollow your favorite stocksCREATE FREE ACCOUNT Kevin Warsh, U.S. President Donald Trump's nominee for Chair of the Federal Reserve, testifies during his Senate Committee on Banking, Housing, and Urban Affairs confirmation hearing in the Dirksen Senate Office Building on April 21, 2026 in Washington, DC. Andrew Harnik | Getty Images Treasury yields rose Wednesday after the Kevin Warsh-led Federal Reserve signaled the possibility of a rate hike later this year, though Warsh himself did not give a forecast.The 2-year Treasury note yield, which more closely tracks short-term Fed interest rate policy, climbed more than 16 basis points to 4.216%. The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose more than 7 basis points to 4.499%.One basis point is equal to 0.01%, and yields and prices move in opposite directions. This week's Federal Open Market Committee meeting marked the first with Warsh as chairman. The median estimate for the Fed Funds Rate to end 2026 is now 3.8%, up from 3.4% in the prior projections from March and signaling the committee sees at least one rate hike as necessary this year. Complicating the forecast is that Warsh was the only one of the 19 officials who did not submit a projection.The FOMC's post-meeting statement also pared down prior language that hinted towards an easing slant in the future."While the rate didn't change, shifts in the dot-plot, votes and language from the Fed meeting have financial markets a bit on edge," said Gina Martin Adams, chief market strategist at HB Wealth. "Despite recent news suggesting some inflation reprieve may be coming with a peace deal in the Middle East, the Fed is increasingly concerned about the inflation landscape."Warsh also signaled major changes ahead for the Fed, noting the establishment of five task forces that will address the central bank communications and balance sheet — among other issues. "Each task force will serve an objective shared by everyone in the system, shared by everyone around that table that I sat with over the last couple of days, a Federal Reserve that is clear-eyed about its mission, fit for purpose, and focused on the future," he said.— CNBC's Jeff Cox contributed to this report. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

But don't expect Carvana to sell you a vehicle at one of its seven Stellantis stores, marking a stark contrast from typical franchised dealers. View More

In this articleCVNASTLASTLAFollow your favorite stocksCREATE FREE ACCOUNT Carvana's new vehicle franchise for Stellantis includes personalised displays and a vehicle "playground" for consumers for each of its core U.S. brands.Courtesy Carvana DALLAS — Carvana is aiming to bring its online strategy for selling used vehicles to sales of new cars and trucks. But don't expect the company to actually sell you a vehicle at one of its seven Stellantis franchised dealerships.Instead, the online vehicle retailer said it intends to use such dealerships as service locations, test-drive centers and potentially "playgrounds" for consumers to decide what vehicle they would like to buy through Carvana's online platforms, marking a stark contrast from how traditional franchised dealers handle new products."Every single car that we sell, whether it's used or new, is online," Tom Taira, Carvana president of special projects who's leading the new vehicle operations, told CNBC during an interview at its franchise in Texas. "That's a very inherent difference. Even coming into the store, you're buying it online, and that's a big difference in how people think about it."Shares of Carvana fell 10% during trading Wednesday, which coincided with CarMax, the company's largest rival, beating Wall Street's quarterly expectations but reporting margin pressure and declining gross profit per retail used vehicle.Through its used vehicle sales, Carvana has become the most valuable auto retailer in the U.S. with a more than $70 billion market cap. Carvana's target with the new vehicle business is to grow its market share and customer base as well as assist used vehicle sales through trade-ins and other means, according to Taira.If the company is successful, the strategy could cause a ripple effect across the U.S. franchised dealership model, which the National Automobile Dealers Association says includes 16,990 retailers that topped $1.3 trillion in sales last year.This week marks the first time Carvana has publicly talked about its plans for new vehicles since it purchased its first Chrysler-Dodge-Jeep-Ram franchised store for Stellantis early last year in Arizona. Its network has since grown to other Carvana-popular markets in Sacramento and San Diego, California; Dallas; Atlanta; Cleveland; and Boston. "When we got into new cars, we said the only way we're going to make this happen is to ensure that it goes the Carvana way. That we actually sell cars exactly the same way that we do to used car customers," Taira said during a media event at its Dallas location. "Why break something that already works?" Customers visiting Carvana's franchised dealership in Texas are encouraged to use their smartphones and QR codes to navigate the location and new car buying process for the online vehicle retailer.Courtesy Carvana Carvana spent roughly $171 million on its acquisitions of new Stellantis vehicle franchised dealerships, excluding its most recent purchase of a retailer in Ohio, according to public filings. The company declined to disclose any further investments in the stores to implement its strategy.Taira and the company also declined to disclose Carvana's new vehicle sales so far or its future expansion plans for additional brands or other Stellantis dealerships. CNBC previously confirmed that the company has quickly grown its new vehicle sales, including a location in Arizona becoming the top-selling dealer in the country for Stellantis."We believe that this was worth it to us, as long as we could go out and increase share and increase the pie," Taira said. He declined to comment on whether the new vehicle business is profitable.To be able to integrate its new vehicle sales into its current website, as first reported by CNBC, Carvana was approved as a certified website provider for Stellantis instead of utilizing mandated third-party companies. Several franchised dealers said they believed that was a unique benefit for Carvana.Stellantis, in an statement to CNBC, said Carvana operates as a "corporate owner" of its brands, similarly to other large publicly traded companies such as Lithia and AutoNation. "We apply the same consistent standards and criteria to all dealer partners, and any organization that meets our qualifications is eligible to operate as a franchisee," the automaker said, adding that Stellantis "certifies tools and services that will enhance our program and be beneficial to our network. All certified providers must complete a rigorous onboarding process and meet program standards and requirement." Test-drives, vehicle 'playground' Carvana has replaced a traditional franchised dealer's vehicle lot at a facility in Dallas with a "playground" with each Stellantis brand having a theme, including. Chrysler minivans having a soccer net.Michael Wayland / CNBC Carvana is using a location in Dallas as a test center for its foray into new vehicle sales. The facility looks like a traditional Stellantis dealership from the outside, but the consumer process for purchasing a vehicle and the responsibilities of its employees are unprecedented.Couches and chairs replace cubicles and sales offices. There are no finance and insurance departments, and instead of an army of commission-based employees, the facility has associates that are paid hourly to assist customers — if they want the help.The experience is meant to be as self-guided as a customer wants. By scanning QR codes located on 10-foot-by-10-foot screens inside the building or on vehicles and displays outside, shoppers can customize a vehicle, learn about a product's features and conduct test-drives before deciding whether to purchase anything. If they do decide to buy something, it's online and not originated from a sales person, the company said.The playground has roughly 50 vehicles divided by brand, with each having a theme. Jeep has an off-road display. Dodge has race tracks, including a Carvana-themed Charger pace car and part of a traditional track fence barrier. Chrysler minivans, meanwhile, have a soccer net and Ram's area is truck-centric. Customers visiting Carvana's franchised dealership in Texas are encouraged to use their smartphones and QR codes to navigate the location and new car buying process for the online vehicle retailer.Courtesy Carvana Carvana is not committing to expanding the exact experience to its other franchised dealer locations, but Taira told CNBC that the overall process of online sales, vehicle testing and service are expected to be consistent throughout the locations."I think the business case and the case for additional stores comes out through this location first," he told CNBC, adding that it built out the store in weeks. "Is it important for us to launch a second? No, I think what's important is that we get this right. … There's no giant plan to build test-drive centers everywhere." Vehicle inventory constraints Once a customer decides to test-drive or even purchases a vehicle from the location, that's where the process can get more complex, depending on what model a consumer wants.Taira said the company chose to purchase Stellantis dealerships for the automaker's breadth of brands as well as its variety of products, which can be a double-edged sword when it comes to consumers actually finding the exact vehicle they want to test-drive or purchase.Unlike a traditional dealership that stockpiles vehicles for customers to test-drive before purchasing, at the Texas facility, Carvana has roughly 50 display cars on its playground, with twin vehicles for test-drives. It had roughly 3,000 new vehicles for sale nationwide compared with more than 60,000 used models as of Wednesday morning, according to its website.This means that a customer may not be able to test-drive the exact vehicle or even model they're purchasing, but the online process tries to match the best test-drive vehicle possible with what they want. It also describes what's the same and what's different. Stock Chart IconStock chart iconCarvana's stock over five years. Looking at the Texas location's system for vehicles such as an $87,000 Ram 1500 RHO performance model, the closest thing on-site for a test-drive was a roughly $61,000 Ram 1500 Big Horn with the same interior and four-door configuration but no other feature matches, including its performance engine.It's why traditional automotive dealers have large vehicle inventories, especially for pickup trucks that have a litany of build options and wide bandwidth of performance specs.Taira said Carvana is continuing to take lessons learned from its year-plus experience of selling new vehicles into its day-to-day operations. He said the company is learning what vehicles to keep in stock and is working to ensure customers know they are buying a new vehicle rather than a used one."We're going through all this technology. This is brand new," Taira said. "All these things are active, meaning the amount of progression we're going to make over the course of the next days to weeks to months."Taira said the company prioritizes new vehicle sales to local customers, much like it does for used vehicles, to avoid additional costs, but it does use its nationwide logistics network and more than 100 U.S. Carvana locations when necessary. Carvana will service vehicles A major question of Stellantis franchised dealers and Wall Street analysts before Carvana revealed its new vehicle plans was how the company planned to service the new products it sells.Taira said the company, for the time being, will operationally run its service departments like a traditional franchised dealer, but with its guiding strategy of transparent, nonhaggling pricing and "hassle-free" customer experience."As it relates to how you actually do service, they're traditional. It's a traditional setup in that way," he told CNBC. "In that way, what we're doing … as it relates to service, we believe the same principles that we have with selling cars." A map with a QR code shows the Jeep vehicle area in Carvana's vehicle "playground" at its franchised store in Dallas, Texas. Each vehicle has a number as well as an accompanying QR code to learn about the vehicle.Courtesy Carvana At the end of the day, selling cars is Carvana's core business, but servicing vehicles has historically been a lucrative market for franchised dealers, along with customer financing, which Carvana has always focused on for its business.Much like its used vehicles, Carvana is currently only accepting cash or offering financing through the company itself, including selling consumer auto loans it originates to institutional investors and partner banks, such as Ally Financial, to maintain liquidity.Taira did not dismiss the possibility of Carvana offering leasing or using Stellantis' financial services, which have been highly profitable for automakers, but said the offerings would need to seamlessly integrate into its current online selling platforms."Part of what makes this great, this experience, is what we already know. What we already know is the system that we have in place," he said. "That does not mean that integration isn't something that we're going to be [doing] as part of our learning and experimentation going forward." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.