Megan Leonhardt
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Senior economics writer with @barronsonline, previously @FortuneMagazine, @CNBCMakeIt, @MONEY. Send comments, questions to megan.leonhardt(at)barrons(dot)com
Articles by Megan Leonhardt
Review & Preview: Brace Yourself
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Investors may pay a price for the Fed's zipped lip
The Federal Reserve is widely expected to keep interest rates unchanged at the conclusion of its July 28-29 policy meeting. Yet, traders are still pricing in a 38% chance of a interest-rate hike as of Friday, up from 12.8% a week ago, based on the CME FedWatch tool. The disconnect may be the new normal under Fed Chairman Kevin Warsh, who has disavowed forward guidance, or public commentary on the Fed's economic and interest-rate outlook.
Jobless Claims Unexpectedly Plunge to Levels Not Seen in Over 50 Years
U.S. jobless claims sunk to levels not experienced since 1969. Only 187,000 Americans filed for initial unemployment benefits in the week ending on July 18, the Labor Department reported Thursday. That's a decline of 22,000 from the previous week's 209,000 initial jobless claims filed and far below the 215,000 level economists surveyed by FactSet expected to see.
Review & Preview: Rough Start
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The Fed's hawkish tone doesn't signal rate increases—at least not yet
Megan Leonhardt The Federal Reserve is far from declaring “mission accomplished” in the fight to lower inflation, but for most of the central bank's policymakers, cooler price-growth readings this past week have reduced the pressure to raise interest rates. New chairman Kevin Warsh appeared before Congress for two days this past week , spending more than five hours answering a barrage of questions from lawmakers.
Consumer Sentiment Returns to Near Pre-War Levels
26 min ago The July reading of consumer sentiment climbed to its highest reading since February, prior the start of the war in Iran and the surge in gasoline prices. The University of Michigan’s consumer sentiment index increased to a reading of 54.4 from June's 49.5, according to preliminary results released Friday.
The Dallas Fed's Logan says interest rates need a little boost
Megan Leonhardt Inflation came down a somewhat in June, but that hasn't changed Dallas Federal Reserve President Lorie Logan's mind about the need to raise interest rates. In prepared remarks on Thursday, Logan said she currently believes that “modestly” higher interest rates would generate a better balance between economic risks and the Fed's mandates to stabilize prices and maximize employment. “Inflation has been too high, for too long, and does not appear to be on track all the way back to 2%.
Retail sales rose less than expected in June as gasoline prices fell
Megan Leonhardt The monthly estimate of consumer spending was a bit softer than expected for June, but the more muted gains were largely driven by lower prices at the gas pump last month. Taking into account that inflation was cooler in June and Americans spent less to fill up, it suggests that real consumption growth actually picked up and paints a fairly strong picture for second-quarter economic growth. Retail sales rose 0.2% in June from May, the Census Bureau reported Thursday.
Warsh Wraps Up Time on Capitol Hill
After more than five hours over two days, Warsh has finished testifying to congressional lawmakers.
The Role of Regional Fed Banks
14 min ago In the spring, Fed Gov. Chris Waller proposed consolidating some of the back-office function and operations at the 12 regional reserve banks to reduce redundancies and cut costs. That raised a few eyebrows, especially at a time when Fed independence was under fire. Lawmakers asked Warsh what he thought about the plan, and if he agreed that regional presidents and board directors are responsible for day-to-day operations and not the Federal Reserve Board in Washington.
Should Fed Independence Be Limited to Monetary Policy?
25 min ago The question of whether the Fed's independence should be narrowly tied to its monetary mandate was raised by Sen. Bill Hagerty, a Republican from Tennessee. A Supreme Court ruling that blocked Trump from removing Gov. Lisa Cook established a carve-out for the Fed based on the premise of the central bank's independence. In another case, the court decided a president can remove those other independent agencies without cause.
Here's the Timeline for the Task Forces
Warsh wants briefings with his task forces to start in a matter of a couple of months--and their work wrapped up by year's end. "I'm not a very patient person," he said. "People have said that to do all this good work, you'll need years, I gave them six months." Warsh said he thinks FOMC members, who will need to vote to approve any changes, will get briefings as early as September.
Warsh Dodges Questions About Trump
Democrats repeatedly asked Warsh about President Donald Trump and what contact they have. Sen. Chris Van Hollen, a Democrat from Maryland, asked Warsh if he had communicated with Trump since he was sworn in as Fed chairman seven weeks ago. "I just don't want to be in the business of sharing discussions that the president and I have," Warsh answered.
Wholesale inflation fell in June as gasoline prices tumbled
Megan Leonhardt Prices paid by businesses last month fell, largely because the pressures from soaring gasoline prices eased. The producer price index for total final demand declined 0.3% in June, bringing annual growth to 5.5%, the Bureau of Labor Statistics reported on Wednesday morning. That's the first monthly decline in the index since wholesale inflation unexpectedly dipped 0.2% in August 2025. The latest results were in line with economists' expectations for a 0.3% decline in June.
AI Will Probably Raise Prices in the Next 12 Months
20 min ago AI is having an effect on both demand and supply, Warsh told Sen. Jack Reed, a Democrat from Rhode Island. But the effect on demand is coming much more quickly right now. Warsh says he sees it in the capital investment, but also the prices of memory chips. "We're inferring, which is just a fancy word for guessing, when the effects will happen on the supply side of the economy," Warsh said.
AI Will Ultimately Create Jobs. Older Workers Will Have a Tougher Time.
AI won't eliminate jobs at a catastrophic rate, Warsh said. "I believe that this is a long-term job creator, but will it be disruptive, and will some people have their jobs at jeopardy because of the new technologies on that? I can't offer any sort of guarantee or comfort," Warsh said. For college graduates, which research has suggested are on the forefront of the AI displacement, Warsh was optimistic.
Warren Grills Warsh Aout Bowman's Closed- Door Client Meeting
15 min ago Sen. Elizabeth Warren, the Banking Committee's ranking member, on Wednesday. (Daniel Heuer/Bloomberg) Warren asked grilled Warsh about a report that the Feds's vice chair for supervision was the featured guest at a closed-door client event during the central bank's so-called blackout period. The Wall Street Journal reported that Michelle Bowman spoke about both monetary policy and regulatory policy, which officials are barred from discussing during the days before FOMC meetings.
Panel Chair Gives Warsh's Task Forces a Thumbs-Up
Chair Tim Scott, a Republican from South Carolina, said he thinks the task forces that Warsh has set up are "fantastic." Warsh announced five task forces last month at his first news conference after his first FOMC meeting as Fed chairman. The task forces will review Fed communications, the inflation framework, the balance sheet, economic data, and productivity and jobs.
Out of the Gate, Warren Puts Warsh on the Hot Seat
17 min ago Sen. Elizabeth Warren, the committee's ranking member, told Warsh that she wasn't impressed with his testimony during his confirmation hearing. The Massachusetts Democrat contended that Warsh refused to answer "basic factual questions." She pointed out that Warsh was confirmed by the Senate in the tightest vote for a Fed chair in American history, confirmed on a party-line vote—the first time ever in the Banking Committee's history for a Fed chair.
Senate Hearing with Warsh Kicks Off
The Senate Banking Committee Chairman Tim Scott has gaveled in the start of Wednesday's hearing.
Take Two: Warsh Faces Senate Questioning
Federal Reserve Chairman Kevin Warsh is back in front of Congress for a second day of questioning, this time from the Senate Banking Committee. Warsh, who has been in his position for just seven weeks, will deliver remarks on the state of the U.S. economy and monetary policy before delving into individual questions from committee members. The hearing kicks off at 10 a.m. Eastern.
Wholesale prices fell by 0.3% in June
Megan Leonhardt Prices paid by businesses last month fell, but the results were in line with expectations as the pressures from soaring gasoline prices eased. The producer price index for total final demand declined 0.3% in June, with the annual growth hitting 5.5%, the Bureau of Labor Statistics reported on Wednesday morning. That's the first monthly decline in the index since wholesale inflation unexpectedly dipped 0.2% in August 2025.
Review & Preview: Inflation Cools
It was a jam-packed day for the markets: earnings season started strong, oil futures fluctuated, Federal Reserve Chairman Kevin Warsh testified in front of lawmakers, and the latest June inflation report delivered a cooler-than-expected reading that should make policymakers hold off on raising interest rates—for now. The Dow closed just above the flatline at 0.02%. The Nasdaq Composite was up 0.9% and the S&P 500 finished the day up 0.4%.
For This Panel Member, a 'Quieter Fed' Raises Concerns
Michigan Democrat Rashida Tlaib told Warsh that his communications strategy of having Fed officials speak less in public worries her. Tlaib pointed out that it seemed like Warsh wants a "quieter Fed," but she thinks that would lead to a central bank that speaks only to the well-connected and market participants--privately. She asked Warsh what steps he would take to ensure that didn't happen.
Warsh Wraps for the Day, Faces Senate Next
The House Financial Services Committee wrapped up its hearing, but Warsh isn't finished on Capitol Hill. The Fed chairman will be back on Wednesday to testify before the Senate Banking Committee. That hearings starts at 10 a.m. Eastern.
Are the Fed's Tools Enough to Counter the President's Policies?
One of the big questions for the Fed is whether the central bank's monetary policy tools can counter policies enacted by the president or Congress that drive up inflation or reduce employment. Warsh didn't have a good answer. "We have tools that are powerful—whether they're working at cross purposes or consistent with them, is never easy to know in real time," he told the panel members.
Warsh Dodges on Black Unemployment
There's no question that racial employment disparities plague the labor market. Rep. Ayanna Pressley, a Democrat from Massachusetts, pointed out that black unemployment is consistently higher than the national average. The black unemployment rate was 6.6% in June, compared with the 4.2% overall rate. Pressley asked if Warsh would commit to confronting the workforce challenges that black workers are forced to endure.
The Fed Supports Homeownership. 'I'm a Great Believer in the American Dream.'
Sales were just 4.1 million last month, down about 2.4% from May’s revised level of 4.2 million, according to data released by the National Association of Realtors.
AI Hasn't Led to Mass Layoffs and Is Improving Productivity
Looking over the last few months, Warsh said AI hasn't displaced workers. It has made them a bit more productive. Warsh characterized AI as a supply shock in the U.S.: "I have to admit, it's happening faster than I would have projected 18 months or two years ago." AI is growing at exponential rates. Something like a "hyper Moore's law" is happening, he added.
Fed's Job Is To 'Unstick' Prices
29 min ago Warsh is coming for the so-called sticky prices that Americans have been dealing with for more than five years now. "The longer that prices have been above the inflation target , it's usually a bit harder to dislodge them and get them lower," Warsh said.
June CPI Still Too Early to Call 'Mission Accomplished,' Warsh Says
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Warsh Won't Relitigate Fed's Past Rate Decisions
Cited by many was when the Fed, led byJerome Powell, was late in raising rates because the policymakers believed the surge in inflation that started in 2021 was transitory.
U.S. Poised to Be Big Winner on AI
31 min ago The U.S. is at the forefront of AI technologies, Warsh said. Both the human capital and the capital provided from investors are happening here, he pointed out. "It is not the job of the central bank to provide or be certain of what the consequences are over the next 12 or 24 months, but we recognize that the United States is likely to be a big winner," he said. Warsh believes AI will deliver broad benefits to the economy, but added he doesn't want to sound overly complacent about it.
Fed's Dual Mandate Isn't 'Balancing Test'
There isn't an automatic tradeoff between the Fed's dual mandate: price stability and maximum employment. "I do not think we have a cruel choice between stable prices and full employment," Warsh said. "I think the mandate that you and Congress gave us are entirely consistent." If the Fed ensures stable prices, Warsh says that gives the American economy room to thrive and businesses can hire more employees.
Communication Reforms Aren't About Reducing Transparency
39 min ago Warsh has said the communications task force will review the Fed's press conferences, economic projections, policy statements, and public remarks. But the chair told the panel that he wouldn't commit to creating a fixed public standard that would trigger a press conference for FOMC decisions and procedural changes. Instead, a press conference would be decided case by case. The communications review and any updates, he noted, would aim to get monetary policy right.
Warsh: Fed Will Stay in Its Lane
29 min ago Republicans spent a lot of time hammering the point that the Fed concerned itself with matters outside of its dual mandate, including diversity and climate change. Warsh, however, was clear that the Fed's obligations are clear and--under his leadership--would focus on its dual mandate when it comes to monetary policy. "You told us that our job is full employment and price stability. You gave us plenty of other hard work to do," he said.
Warsh Wants Changes to Balance Sheet
32 min ago Warsh said it's not news that he's no fan of the Fed's balance sheet policy. But he doesn't want to prejudge the findings of the task force focused on this aspect of the Fed, saying any changes will be communicated thoroughly. "No changes in balance sheet policy would happen without good advance notice to the likes of this committee and broadly financial markets," Warsh said. In crises, Warsh says he understands the need for a central bank to step into markets, to create a fair price.
Fed Task Forces Are in 'Discovery Mode'
33 min ago The Fed's task forces are just getting started. And when they make recommendations, Warsh told committee members that those recommendations will be shared first with members of the FOMC. "There are going to be 19 of us around the table that are committed to listen to them with an open mind and make decisions, but there's going to be nothing held in secret here," Warsh said.
Fed Has Tools to Deliver Price Stablity, Warsh Says
30 min ago Much of the inflation surge is because of high oil prices, which the Fed can't control. But Hill, the Financial Services chair, told Warsh that the Fed can control how it reacts. He asked how the the central bank plans to accomplish delivering price stability given the policy tools at its disposal. "The Fed may be able to look through these inflationary pressures, but the Fed has believed that before and has been wrong," Hill said.
Top Democrat Wants Warsh to Defend Fed's Independence
Ranking member Maxine Waters wants Warsh to commit to defending the Fed's independence, warning that relying on the Supreme Court isn't enough. "I hope we hear from you today how exactly you will defend your colleagues and the Federal Reserve," Waters said. The California Democrat added that Wash should also take no comfort in the high court's ruling that shielded the Fed Gov. Lisa Cook from being fired by President Donald Trump.
Inflation Tops Lawmakers' Agenda
High inflation is squarely in focus for lawmakers today. In his opening statement, committee Chair French Hill said Congress expects the Fed to remain focused on its mission to deliver price stability, and keep at it until it is achieved. French, an Arkansas Republican, not only condemned the inflation surge but took aim at what he called the "mission creep" that he says has been a feature of the Fed in the recent years.
Cooling June Inflation Keeps July Hikes at Bay, but Oil Risks Remain
31 min ago The June inflation data proved much cooler than expected, with even non-energy categories posting softer price growth. That all but guarantees the Fed will not raise rates at the end of the month. But policymakers will still be watching the longer-term trends, especially with the Iran war heating up again. Headline inflation posted a whopping monthly decline of 0.4% in June, sending annual growth tumbling to 3.5%.
Warsh Hearing Gets Underway
The House Financial Services Committee kicked off the hearing on Warsh's testimony on the monetary policy report on Wednesday morning.
Clothing Prices Unexpectedly Drop
The summer sale season is underway, and apparel prices are apparently getting steep cuts. Apparel prices posted an outright decline of 0.6% month over month in June. That's a sharp reversal from May's 0.3% monthly increase. Apparel prices have been under pressure for months as higher tariffs have weighed on imports and input costs. Several economists expected those pressures to continue in June, but the peak pass-through may already be behind consumers.
Auto Insurance Posts Second Straight Monthly Decline
30 min ago Owning a car these days is not a cheap endeavor, but it got a bit easier for Americans last month. Gas prices were lower in June, and so were auto insurance costs. The CPI's motor vehicle insurance index declined 2% in June after falling 1.7% in May. Compared to a year ago, motor vehicle insurance prices were down 4.1%. Vehicle prices were also encouraging. Used car and truck prices declined 0.2% month over month in June after rising 0.1% in May.
Goods and Services Prices Cool
Goods prices, which faced greater pressure from higher tariffs, remained cool in June while services prices showed a rare pullback. Commodities prices, excluding food and energy commodities, logged another month of declines. The index fell 0.1% month over month in June, matching May's pace. Still, compared to a year ago, goods prices were up 0.8%.
AI Buildout Presents New Challenges for the Fed, Warsh Says
31 min ago U.S. economic activity is expanding at a solid pace, but according to Warsh, the most striking thing about the economy right now is the surge in business investment in artificial intelligence. Warsh highlighted the impact of the rapidly accelerating pace of the buildout of data centers and the immense demand for equipment and software to support AI. He pointed out that investment in equipment overall increased about 8% in the first quarter compared to a year earlier.
Food Inflation Remains Steady in June
Although gasoline prices tumbled dramatically, Americans were not as fortunate when it came to food prices. The CPI's food index rose 0.2% month over month in June, matching May's pace. Grocery prices, as measured by the index for food at home, also increased 0.2% over the month, up slightly from May's 0.1% monthly gain.
Shelter Inflation Sees Smallest Monthly Gain Since Early 2021
Falling energy prices may have driven the bulk of June's deflation, but shelter also helped ease price growth. The CPI's shelter index rose just 0.1% over the month. That's the smallest one-month change reported for that index since January 2021, the bureau reported. In May, shelter inflation rose 0.3% on the month. Rents also increased just 0.1% month over month in June. The CPI's index for owners' equivalent rent rose 0.2%.
Energy Prices Post Biggest Monthly Decline in Six Years
Energy prices saw their biggest decline in six years in June, helping to push inflation down. Energy inflation fell 5.7% month over month in June after rising 3.9% in May. That was the largest one-month decline since April 2020, the bureau reported. Much of that was due to falling prices at the pump. The gasoline index decreased 9.7% over the month. Electricity prices were also down 1% in June, but natural gas rose 0.5% during the month.
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