When the going gets tough, just keep spending

June 17, 2026

AI Summary

5 min read

When the going gets tough, just keep spending

Federal Reserve Chairman Kevin Warsh held his first press conference today, and the word "consumer" was mentioned exactly once. That's striking because consumer spending accounts for roughly 70% of the economy — and the latest data shows consumers are still spending at a pace that surprised economists. The May retail sales report came in up 0.9% from April, well above expectations, and it wasn't just gasoline prices driving the number. Meanwhile, Warsh announced five new task forces, scrapped forward guidance, and made clear that 2% inflation remains the target — even as the latest CPI reading shows inflation at 4.2%.

The Fed under new management

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What you'll learn

1 (01:09) **Fed Chair Warsh Announces Task Forces, Drops Forward Guidance** - Kevin Warsh holds his first press conference, creating five new task forces and signaling an end to forward guidance.
2 (05:28) **Consumer Spending Surges in May** - Retail sales rose 0.9% from April, far exceeding expectations, driven by more than just gas prices.
3 (08:07) **Hobby Spending Booms as Consumers Seek Community** - Sales of sporting goods, craft supplies, books, and musical instruments rose 11.3% year-over-year.
4 (10:57) **Household Formation Slows Sharply Due to Affordability** - Harvard report shows new household formation dropped from 2 million in 2021 to just over 1 million in 2025.
5 (13:49) **Market Numbers** - Dow down 1%, NASDAQ down 1.3%, S&P 500 down 1.2%. Retailers like Walmart and Macy's fell. Allbirds rebrands as an AI company.
6 (16:43) **The Dollar's Dominance and Its Fragile Foundations** - A look at the US dollar's role as the global reserve currency and the risks to its status.
7 (27:33) **Final Note: On Nomenclature** - The host notes the Fed's website lists Kevin Warsh as "Chairman," not "Chair," and will use that title.

+ Full timestamped outline available in the app

Guests on this episode

Kevin Warsh Kathy Bostjancic

Show Notes

Retail sales were up 0.9% in May, which is a generally positive economic sign. But it doesn’t square with our reality, in which price inflation outpaces wage growth. That is, until you look at that pesky personal savings rate. In this episode, YOLO consumers in a grim economy. Plus: Fed Chair Warsh holds rates steady, the rate of new households is falling, and what would happen if the U.S. lost its global reserve currency status.

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