AI Summary
5 min readThe Fed's First Rate Hike Since 2023: A Signal of Discipline
On a day the Federal Reserve raised interest rates for the first time in three years, Fed watcher Axel Merk joined Adam Taggart to unpack what the decision really means. The hike was widely expected—markets had priced in over 90% probability—but the unanimous vote and the tone of Chair Kevin Warsh's press conference carried deeper significance. Merk described the press conference as unusually disciplined: Warsh answered questions succinctly, declined follow-ups, and wrapped up in 30 minutes. "The less you say, the more important it gets," Merk observed, "because then the few things you say, the market will take seriously."
What Warsh Said—and Didn't Say
Warsh framed the decision around three buckets: the economy has strengthened, inflation trends haven't improved enough, and geopolitics contributed to the need for action. He explicitly avoided declaring that the Fed had entered restrictive territory. Instead, he said the Fed had "removed some accommodation," which Merk interpreted as a deliberately hawkish signal. Markets responded by pricing in roughly half a rate hike more over the next year than they had before the meeting.
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What you'll learn
- 1 (01:02) **Fed Hikes Rates for First Time Since 2023** - Adam Taggart and Axel Merk break down the unanimous decision and Kevin Warsh's press conference style.
- 2 (02:02) **The Fed’s Core Mandate: The Risk-Free Rate & Inflation** - Axel explains why the Fed’s actions matter for every asset and why fighting inflation is the priority.
- 3 (04:53) **Monetary Policy as a Credible Signaling Exercise** - Merk argues that Warsh’s power comes from saying less, making each word more impactful.
- 4 (07:12) **Warsh’s Philosophy: Price Stability Over Employment** - The discussion clarifies Warsh’s priority between the Fed’s dual mandates.
- 5 (09:09) **The "No-Hire, No-Fire" Economy and Labor Market Weakness** - Adam and Axel discuss the paradox of a low unemployment rate with a stagnant job market.
- 6 (11:52) **Fed Independence: Staying in the Swim Lane** - Axel defines what true Fed independence means under Warsh’s leadership.
- 7 (13:51) **The Fed vs. Fiscal Policy: The Debt Monetization Threat** - The conversation turns to the limits of monetary policy against fiscal irresponsibility.
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Guests on this episode
Show Notes
REGISTER FOR THOUGHTFUL MONEY'S FALL ONLINE CONFERENCE (OCT 17TH) at https://www.thoughtfulmoney.com/conferenceThe Fed just hiked its policy rate for the first time since 2023.How important is this?And what will the likeliest implications be?To find out, we had the great good fortune of sitting down for a livestream with Fed watcher Axel Merk today, who not only shared his real-time reaction to today's Fed news, but also took live audience Q&A.#federalreserve #interestrates #inflation _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter.We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.All the details on Thoughtful Money's relationship with the financial advisors it endorses, many of whom regularly appear on this program, can be found in the following documents. We highly recommend you review these documents as they cover the terms that will apply should you choose to work with one of these firms at any time after watching this video.Thoughtful Money Disclosure Document: https://thoughtfulmoney.com/disclosureThoughtful Money Agreement: https://thoughtfulmoney.com/agreementIMPORTANT NOTE: There are risks associated with investing in securities.Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.Copyright © 2026 Thoughtful Money LLC. All rights reserved.
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