"if Warsh is serious about 2% then DOTS are materially wrong or the economic forecast is too optimistic. I would interpret this as DOTS are too low... Consumers have cash and are spending. Businesses are in solid-to-great shape. That said, if the Fed is comfortable with sub-3% but above-2% core inflation, which appears to be the case… a de facto changing of the target from 2% to 2.5%, then future Fed actions will be digested easily by markets. The last Core CPI print was 2.45%. For markets, today does not relieve uncertainty and think Fedspeak next week will be more informative. Warsh has previously supportive stacking hikes earlier in a cycle which would point to an Oct hike and if he is bulled up on the economy and thinks AI disinflation kicks in later this year or 2027, then Oct or Dec ends this hiking cycle. For now, think you want to remain CAUTIOUS on markets with longs in Tech and short SMid-Caps and some Int’l given the moves in the USD and relatively growth outlook. The press conference points to further hikes, likely more than are being forecasted by the Dots." - JPMorgan Market Intel