A ‘Credibility Shock’ Looms Over the Fed

Andrew here. The bond market is falling again after the Fed’s decision to hold rates steady. But the real story is the insistence by Kevin Warsh, the Fed chairman, on letting markets run their course — a vision he telegraphed before getting the job. He also said he wanted a quieter central bank, but for now, there is plenty of short-term noise. More below.

Separately, a report in The Financial Times that the hedge fund darling Situational Awareness — known for its big bets on artificial intelligence — is overextended and seeking new capital serves as a classic reminder that one fund’s trouble can signal broader market stress. Watch this space.

We’re also tracking speculation that SpaceX wants to meaningfully break into the cellular market by acquiring more spectrum. Never count Elon Musk out. But with roughly 80 percent of Americans living in urban areas, that would require a significant ground-based infrastructure buildout (remember: orbital satellites need line-of-sight to a device) and a huge amount of capital.

Mixed messages

Kevin Warsh, the Fed chairman, has said he welcomes “a good family fight” among central bank policymakers. It looks like he’s got one with investors now, too.

Article source: https://www.nytimes.com/2026/07/30/business/dealbook/fed-warsh-credibility-shock.html