Nomi Prins — Warsh's First Test Isn't Rates. It's Real Assets.

The FOMC held — and that was the least interesting part

• The FOMC kept its target range at 3.5%–3.75% in a unanimous vote — the first no-dissent vote in a year. Warsh "was never going to open his time as chair with a rate hike," and the front end was already priced for patience.
• The decision itself was "the least interesting part of the meeting" — the place to watch is what Warsh signaled about inflation, liquidity and how much support the Fed will still provide Wall Street beneath the surface.

What Warsh signaled — vigilant on inflation, vague on the path

• Warsh claimed he's still concerned about inflation, stressing the Fed "will deliver price stability" — but wants "more selective data and targeted analytics" before changing course, and refused to submit "dot plot" projections, adding to the uncertainty over the rate path.
• The bind: he acknowledges inflation risk without forcing a move. His verbal tightrope is to "sound vigilant about inflation without signaling that the support the market is leaning on is about to be pulled" — and one hawkish sentence can still set off forced selling.

Inflation has reaccelerated since the Iran war

• May CPI hit 4.2%, the fastest pace in three years, with inflation rising since the Iran war broke out; a U.S.-driven ceasefire "may take some pressure off oil for now."

The real tell: the balance sheet — "I call it QE"

• The Fed ended QT on December 1, 2025 after shrinking its holdings for 2+ years; 11 days later (December 12) it restarted buying Treasury bills (~$40B/mo) under "reserve management purchases." "The Fed calls it reserve management. I call it QE. The label does not change the effect."
• The balance sheet is growing again — Treasury holdings ~$4.48T as of June 10, up $200B+ since December. It buys via primary dealers / the secondary market (not directly from Treasury), but the purchases still add reserves and ease short-term funding even as heavy new supply is auctioned. The 10-year has held near 4.5% through it.

The catch: the buying is already tapering into Warsh's first test

• The buying was front-loaded: $40B/mo from December through mid-April to get ahead of the spring reserve drain, then cut to $25B and now ~$10B.
• So the support that kept Treasury-market pressure contained is "already fading, right as Warsh takes hold of the chair." Whether the taper keeps running or the Fed steps buying back up is "his first real balance-sheet test" — watched by markets, the financial networks and the White House.

Why it matters for hard assets — a liquidity selloff, not a physical break

• As Prinsights detailed Monday, hard assets sold off on liquidity pressure, fund redemptions, algorithms and paper-market stress — tied to war, inflation and anticipation of the new chair — "not because of the physical supply and demand realities."
• Gold, silver, copper, uranium and rare earths each react differently to Fed policy, but none can be created by it. The metals hit hardest "have already started to bounce as war tensions began to let up" — "the drop was about sentiment and liquidity, not a break in the physical setup."

What the Fed still cannot print

• The Fed can hold the front end, move expectations with a sentence, buy bills, manage reserves, and pressure the dollar and the 10-year — yet "it cannot print commodities, magically fix supply chains or dictate geopolitical outcomes. That was the limit former chair Powell never fully understood or accepted."
• Premium tease: next week's Pulse Premium monthly makes the case for one metal beyond the Fed's reach — China controls >80% of global supply, has tightened exports this year, and prices are up >200% (i.e. rare earths) — and names "one strategic producer outside of China." The specific ticker is paywalled and is not captured here.