A week ago I asked if market participants should take Kevin Warsh at his word when it comes to the incoming Fed chair’s emphatic assertions around the sanctity of independent monetary policy in the US.

It was a rhetorical question. The answer’s obviously “no.” No, we shouldn’t take Warsh’s word for it that Fed policy won’t be unduly influenced by The White House and Donald Trump’s overt calls for lower rates.

That’s not (necessarily) to cast aspersions. Warsh is qualified, experienced and, I think, genuinely convinced he can create and maintain some space for policy independence. The problem is, he’s wrong. As I put it during his confirmation hearing last month,

You can’t run a truly independent operation in Trump’s government. It’s impossible. More to the point: It’s anathema. This is an authoritarian system. The idea of an independent institution — any independent institution, let alone one responsible for setting the price of money — is definitionally discrepant.

Certainly, Warsh will do a better job of maintaining a veneer of credibility than, say, Kevin Hassett, but that’s a low bar.

Speaking of the “other” Kevin, Hassett on Friday made it clear what’s expected. “There are no signs that inflation is spiraling out of control [and] I believe we will see interest rate cuts this year because Warsh agrees,” he told Fox.

Hassett’s right, inflation’s not “spiraling out of control.” But I’m not sure that’s the threshold we should use when debating whether to cut interest rates at a time when US equities are hitting new record highs almost daily and one of the Fed’s own measures suggests financial conditions are already very loose.

Rather, what we should be asking is whether disinflationary momentum has stalled or whether it’s at least in jeopardy of stalling, and the answer to both of those questions is unequivocally “yes.”

The figure above, from BMO’s Ian Lyngen, shows the distance of core PCE from its trailing 12-month low along with the average of the last 15 episodes during which that measure, which is central to the Fed’s decision calculus, rose at least half a point from its local nadir.

The cycle low for core PCE was 2.6% in April of last year. We’re 0.6ppt from that currently. If history’s any guide — or, more accurately, if the arithmetic mean of past is precedent — there’s more upside.

“On average, core PCE tends to remain stubbornly elevated for years to come in instances when [it] climbs by more than 50bps off the trailing one-year low,” Lyngen remarked.

It seems reasonable to ask if the implicit threat (i.e., of a sustained upswing in core PCE now that it’s more than half a point off the cycle low) is even greater in the current environment given the tariffs and the war.

Conveniently for those demanding rate cuts, Warsh doesn’t like core PCE as much as he likes various “trimmed mean” inflation metrics which, happily, are still moving lower.

Asked last week by CNBC whether he thinks Warsh will be able to cut rates this year, Paul Tudor Jones said, “no chance.” “I’d be thinking about raising them,” he added.