Federal Reserve Chair Kevin Warsh pledged Wednesday that the central bank is “going to deliver 2% inflation and not a whisper more,” citing the Fed’s long-held target.

Bond markets gave him some side-eye. The yield on 30-year Treasury bonds hit the highest level in 19 years on Wednesday, following Warsh’s comments after the Fed held its benchmark interest rate at 3.5% to 3.75%, suggesting traders aren’t confident the new chair is ready to raise rates to tame inflation.

‘Play the Ball, Not the Referee’

Warsh emphasized his goal of reducing the amount of forward guidance the Fed offers. He prefers markets act more independently of the central bank, which he says will give policymakers a “direct and unfiltered” view of the US economy. “Market participants are learning to play the ball, not the referee, and market prices will continue to respond in the direction and magnitude they see fit,” Warsh declared. “This is, in my view, a change for the better.”

After his remarks, the 30-year breakeven, a key bond market measure of inflation expectations, rose the most in a single day since November 2024. Torsten Slok, chief economist at Apollo, said the lack of guidance was contributing to volatility, sending yields “up and down like a yo-yo.”

Many believe the Fed still has wiggle room in dealing with inflation. While the PCE index, the Fed’s preferred gauge, rose 4% year over year in May, more recent data have indicated cooling. The US Bureau of Economic Analysis is scheduled to release June PCE data today. Additionally, labor and economic growth have remained solid amid economic uncertainty, which some economists believe supports the central bank’s holding pattern:

• “While inflation remains elevated, we believe a cooling labor market and the limited effectiveness of monetary policy against supply-driven inflation pressures will make additional rate hikes difficult this year,” said Vanguard senior economist Adam Schickling.
• “The most important uncertainty facing markets today isn’t Fed messaging; it’s the combination of geopolitical risks and the long-term economic impact of AI,” he added.

Hawks Behind the Hold: Three regional Fed presidents, who serve on the monetary policy committee along with the central bank’s governors, broke ranks and voted for a rate hike Wednesday, the most officials to dissent in one direction in a decade. “Not only do they represent other Federal Reserve governors who also think rates should be going up at this stage of the game, but they could also represent members of the board of governors not wanting to undermine Kevin Warsh,” KPMG chief economist Diane Swonk said, adding those others could vote for a hike in September. KPMG expects two before the end of the year.

The ETF market is looking a lot like showings of Christopher Nolan’s The Odyssey: crowded and breaking records.

There have been 868 ETF launches in the US through July 27, according to CFRA data, putting the market easily on track for yet another record-breaking year. Single-stock and artificial intelligence, or other tech-related funds, have been especially popular, said Deborah Fuhr, founder of the research firm ETFGI. It’s no wonder issuers want to bring more of these funds to market: Investors have poured money into funds that give them leveraged exposure to big names such as Nvidia and Tesla, while products like the Global X Robotics & Artificial Intelligence ETF (BOTZ) have garnered billions of dollars in assets. Now that retail and institutional investors alike have embraced ETFs as easy-to-use and liquid ways to get exposure to some of the most dynamic trends in the market, introduction of new funds isn’t likely to slow down.

“We will continue to see the new launches growing,” Fuhr said. She added that we’ll likely continue to also see existing products, like mutual funds and separately managed accounts, converted to the ETF wrapper.

Searching for ETF Ithaca

A launch far from guarantees a fund’s survival, but that’s not stopping issuers from seeing what sticks. “Right now, the US ETF industry is still in growth mode and newer, smaller issuers are experimenting with multiple launches,” said Aniket Ullal, head of ETF research at CFRA. “We expect only a fraction of these launches to succeed, and it is possible we may see a spike in closures in two to three years.”

But when a fund strikes the right chord, it can take off quickly:

• The Roundhill Memory ETF (DRAM), which launched in April, has already amassed nearly $25 billion in assets.
• The ProShares GENIUS Money Market ETF (IQMM) hit the market in February and has AUM of roughly $18 billion.

Is this pace sustainable? Steve Foy, senior vice president of trading at white-label ETF platform Tidal Financial Group, said that at the level that matters for business sustainability, assets and revenue, the industry’s growth is structural and has significant momentum. “As in any industry, today’s innovations will keep iterating, and investors’ ability to pivot quickly between offerings is one of the hallmarks and strengths of the industry that drives this overall growth.”

Crowded Seas: Looking beyond the US, the global industry has seen a significant increase in the number of new launches over the past few years. In the first half of 2026, there were 1,798 new ETFs launched around the world compared with just 805 in the first half of 2022, Fuhr said. The US and Asia Pacific (excluding Japan) launched the largest number of funds this year, while Latin America had just 34.

Who said bipartisanship is dead?

Senator Bernie Moreno, a pro-business Republican from Ohio known for his focus on border security and economic deregulation, and Senator Elizabeth Warren, a Democrat from Massachusetts who advocates for progressive economic and social policies, don’t agree on much. They’re in lockstep, however, in their belief that Congress must act now to fix Social Security’s shaky finances. To that end, the strange bedfellows have put forward a new proposal to lift the Social Security tax wage cap, set at $184,500 for 2026. Lifting the cap would mean income above that level would be taxed at the normal rate, raising significant additional revenues for the program while spreading the pain of higher taxes across more income earners.

Having these two lawmakers, who have substantial political differences, come forward with a serious proposal for shoring up Social Security’s finances is a big deal, according to Kathleen Romig at the Center on Budget and Policy Priorities. “We haven’t seen a Republican officeholder put forward a serious plan to improve solvency since Sam Johnson did so in 2016,” she told Retirement Upside. “In that sense, it’s very encouraging to see this bipartisan proposal.”

A Sensible Strategy

Rather than tackle the entire solvency problem in one go, Warren and Moreno have proposed taking a big first step by lifting the Social Security wage cap, which would roughly halve the long-term funding shortfall. They argue that a piecemeal approach, while not perfect, could encourage additional public conversation and genuine political debate about how to save Social Security from big benefit cuts.

The proposal has no “donut hole,” noted Chuck Marr, vice president for federal tax policy at the CBPP, meaning it wouldn’t exempt earnings between the current cap and a new floor from Social Security taxes. Prior proposals have suggested capping at the standard limit and restarting the Social Security tax on any income above $400,000.

“We’re not a fan of donut hole policies or the idea that only billionaires should be taxed to fix the program,” Marr said. “There’s certainly plenty of money from billionaires that should be raised, but you need to raise revenue more broadly than that.”

As Romig and Marr noted, there’s precedent and support for this approach:

• In 1994, policymakers eliminated the Medicare tax wage cap, which was once set at the same level as Social Security’s.
• Polling routinely finds that removing or raising the earnings cap is the single most strongly favored policy option among Americans looking to shore up fund financing, per the National Institute on Retirement Security.

Bipartisanship Is Key. For all intents and purposes, bipartisanship will be essential in any real Social Security funding solution. “Back in 1983, Republicans and Democrats held hands and jumped off the cliff together,” Romig said. “With the rules being what they are in the Senate, they’ll have to do so again.”