Weekly Wrap: Free Kevin Warsh!
It’s Friday! This marks the latest installment of our Breitbart Business Digest’s weekly news roundup. We consider our review of the past week’s events complete, although we remain open to revisiting matters if new information arises.
Kevin Warsh finally had his confirmation hearing this week. Up until Friday, it looked like his nomination was stuck between Senator Thom Tillis (R-NC) and Jeanine Pirro, which made things a bit murky. It’s uncertain when his nomination will advance, but a Senate floor vote might still happen before the current speaker’s term ends on May 15.
Powel Pirouette
The day after announcing a continued investigation into renovation cost overruns at the Federal Reserve’s headquarters, D.C. Attorney General Jeanine Pirro stated her office would close the investigation. Kudos to Senator Tillis for effectively pushing politics ahead of fair judicial administration.
Tillis is part of the Senate Banking Committee that needs to approve Warsh’s nomination to head the Fed before it can be voted on by the Senate. The committee has a split of 13 Republicans to 11 Democrats. If even one Republican breaks ranks, that could derail the nomination. Tillis has been supportive for months but won’t vote to advance it as long as the Justice Department looks into Mr. Powell and the Fed.
Current Fed Chair Jerome Powell stated he won’t step down unless the investigation is fully resolved. He has 18 months left in his term after May, and he may opt to act in a shadow chairman capacity. Such a move could undermine the Fed’s institutions and make it tempting for President Trump to dismiss him. Interestingly, the Supreme Court is deliberating on a case linked to Trump’s attempt to remove Fed Director Lisa Cook, highlighting that the legal questions around presidential powers in this context are more complex than many had assumed. Ironically, Powell’s potential dismissal may be tied to his reluctance to engage with Pirro’s investigation.
So where does that leave Mr. Warsh’s nomination? It’s still uncertain. “If the facts warrant, I will not hesitate to reopen the criminal investigation,” Pirro mentioned in a post on X. It’s not exactly a final and definitive end to the inquiry initiated by Tillis and Powell.
Median Cool and Crop
During Warsh’s confirmation hearing, the former governor and prospective chairman suggested the Fed consider monitoring alternative inflation metrics, like the trimmed mean value or PCE inflation measures put together by the Dallas Fed and the median inflation gauge from the Cleveland Fed. We’ve argued that these indicators more accurately reflect underlying inflationary trends than the standard Personal Consumption Expenditures Price Index or Core Index. They certainly outperform the makeshift indexes some analysts use to substantiate their claims about inflation.
The trimmed mean inflation rate accounts for drastic price fluctuations by excluding the most extreme values, which helps minimize distortions created by significant price spikes. Median inflation achieves something similar by examining the center value in the index. Neither metric necessarily ignores essential items like food and fuel, which can have inelastic demand yet are typically overlooked in the core index.
Warsh also believes the Fed might be over-communicating. The constant updates and “forward guidance” may have eroded the Fed’s credibility—often due to misjudgments. A more focused approach on accurate economic measures might serve the Fed better than the current plethora of opinions.
Critics of Mr. Warsh Might Want to Rethink Their Views
Senator Elizabeth Warren, who has transitioned from a reliable academic to a quite vocal leftist figure from Massachusetts, accused Warsh of being a “sock puppet” for President Trump. Basically, she’s suggesting that Warsh won’t independently run the Fed and will just align with Trump’s monetary policy. Others echoed this sentiment, arguing that Warsh’s record reflects a “partisan flexibility” in monetary policy, shifting from hawkish to dovish depending on which party holds the White House.
However, this perspective seems somewhat misguided. Warsh was considered a hawk leading up to the financial crisis in 2008 during George W. Bush’s administration. As the financial system faltered, his position shifted to a more dovish strategy. When the Fed propelled a series of quantitative easing measures, he later adopted a hawkish stance again, arguing that these actions inflated financial asset prices without significant benefits for the average American. This observation is not purely partisan; critics from both ends generally agree with it.
In these trying times under Biden, Warsh accurately pointed out that the Fed delayed in reversing its pandemic-era favorable monetary policies. This misstep has led to the worst inflation in 40 years, with price stability still beyond reach six months in. As Warsh puts it, “inflation is a choice,” suggesting that the Fed opted to support Biden’s spending plans instead of controlling inflation effectively.
To adapt a well-known phrase: Warsh. Adjust your perspective on monetary policy as circumstances shift. What’s going on, Liz?
Game On!
The University of Michigan reports that consumer sentiment is currently at a record low. That said, consumers don’t seem to be feeling too pinched.
Consider Hasbro. The company’s stock jumped over 6% this week after it delivered a positive Q1 earnings forecast and reaffirmed its outlook for 2026. Analysts see significant potential in their Wizards of the Coast Unit, known for publishing the Magic: The Gathering card game and Dungeons & Dragons. Earnings per share are expected to rise about 3.5% this year and about 10% the next.
Almost every product Hasbro offers is influenced by purchasing decisions from American consumers. If consumers were as down as the University of Michigan study implies, one would expect Hasbro’s sales and profits to take a hit. But people are still buying games and toys. This is particularly surprising given the dearth of big Hollywood releases to drive toy demand.
I scream, you scream, we all scream for ice cream!
Happy birthday Sheila Bear, former FDIC chair and author of How Not to Lose a Million Dollars, a financial guide for kids.
Baer highlighted in an email that April 30 marks the anniversary of the debut of the ice cream cone. This event occurred during the 1904 St. Louis World’s Fair. The fair kicked off a seven-month celebration that attracted nearly 20 million visitors globally, introducing the ice cream cone to American audiences.
The tale goes that Ernest A. Hamwi, a Syrian vendor at the fair, sold a crispy waffle-like pastry called Zarabi. When the ice cream vendor ran out of plates, Hamwi creatively rolled up a Zarabi and served ice cream in it— a recipe for success.
This interpretation has been debated, with others claiming credit for the idea, including other exhibitors at the fair. The identity of the ice cream vendor has also been contested. Some point to Italian entrepreneur Antonio Valvona, who patented a machine for creating biscuit cups for ice cream in 1902, and Italo Marchioni, who filed for a patent in the U.S. for a device to make edible ice cream cups in 1903. However, they created flat-bottomed sweets rather than the iconic cone, so we’ll still give Hamwi the credit.
Hamwi eventually managed multiple corn manufacturing businesses he founded himself and continued to innovate how ice cream was served, even filing a patent for a new ice cream cup prior to his passing in 1943. The title of the leading cone manufacturer, however, belongs to another Arab-American entrepreneur, the Lebanese immigrant Albert George. He established the George & Thomas Cone Company in 1918, which later became the Joy Cone Company, now the biggest ice cream cone manufacturer in the world, producing more than 40% of cones sold in U.S. retail and over 60% in ice cream shops and restaurants.
