The Federal Reserve held its key interest rate steady today, but half of policymakers saw a rate hike ahead as the central bank tries to get control of rising inflation. That’s a stark change in posture from the last meeting, and a striking start to Kevin Warsh’s term as Fed chair.

President Donald Trump has heaped unprecedented pressure on the Fed to make money cheaper, and Warsh’s predecessor Jerome Powell alleged the White House ginned up a criminal investigation to drive down rates. So what did Trump have to say about his new appointee holding fast? “It’s all right, whatever.” The markets were less blasé, we’ll get into that reaction below.

But first, let’s do some numbers. At last check Americans were paying 4.2% higher prices in May from the year before, while average hourly earnings only rose 3.4%. Today we learned U.S. consumers bought 6.9% more stuff in that same period. Retail therapy, anyone? — Tony Wagner, newsletter editor

The U.S. consumer is resilient, unvanquished, indefatigable.

The May retail sales report, out today from the commerce department, says as much. Overall sales were up 0.9% from April, way more than economists expected despite high inflation, high interest rates and geopolitical uncertainty.

Of course, some of that spending comes from soaring gas prices driven by war in Iran. Consumers spent 3.4% more at gas stations in May than they did in April, and 26% more than they did in May 2025. But spending was strong in most other categories too, like furniture and e-commerce.

We’ve seen this pattern repeat over decades.

“When the American consumer is faced with a hit to their real incomes, they tend to absorb that hit, lower their saving rate, and maintain spending levels, rather than cut back on discretionary spending,” said Thomas Ryan, an economist at Capital Economics.

That’s exactly what happened in April: When gas shot up, the savings rate went down. Kathy Bostjancic, senior vice president and chief economist at Nationwide, told us she expects Americans saved even less discretionary income in May.

“Consumers do feel miserable,” she said. “They’re not happy with higher energy prices.”

Ranchers on both sides of the border are contending with screwworms, little flies that will essentially eat an animal alive if untreated. After the Trump administration delayed efforts to mitigate the pest, infestations threaten not only cattle but also horses. The pause on livestock exports and imports has ripple effects on many industries.

That’s how Kevin Warsh greeted viewers at his first press conference as Fed chair. It’s a departure, the Wall Street Journal noted, from his predecessor Jerome Powell, who said “good afternoon.” 

When we told you this week that reporters, economists and gamblers scrutinize every word of these pressers, we meant it.