The data is backward-looking but makes the case for no action tomorrow. Import prices are up 6.7% YoY, the highest since post-COVID inflation. Housing starts are down 15.4% as builders are cautious. The big question is what Kevin Warsh will do. No rate change is expected, but the bias for lower rates is likely to be dropped. The key is his news conference and what he says about his relationship with President Trump.

John Cochrane notes that Kevin Warsh is 'the dog that caught the car'—he wanted the job, now what does he do with it?

Warsh has said he wants to change forecasting and doesn't think the Fed's model of the economy is any good. If he's not going to use data dependency, he needs something to look forward to. We might get a change in the Summary of Economic Projections, but the idea of putting out a forecast is probably not going to change.

In the Greenspan years, they used to put options for what was likely to happen in the monetary policy report. Maybe they go back to that.

Trading desks want to know to the minute what the Fed will do, a habit developed over 30 years of openness. The old feeling was to surprise markets. Bernanke changed it to giving guidance so markets do half the work. Warsh doesn't seem to like that.