Warsh Faces First Big Test at Fed

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0:33All eyes are on Fed Chairman Kevin Warsh ahead of his first interest rate decision today, though he'd prefer that they weren't. His view is that the Fed has trained markets to hang on its every word, and he'd rather it say less and let the economic data do the talking. Plus, the Trump administration expands its anti-fraud campaign to state unemployment programs coast to coast. And we'll take a bite of the only gentleman's relish we could get our hands on. It's Wednesday, June 17th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

1:17It's Fed Day, and not just any Fed Day. As new chairman Kevin Warsh prepares for his first-rate decision in press conference, Kevin Warsh has been clear for years that he thinks the Fed talks too much. He wants a central bank that explains itself less, fewer speeches, less guidance. That's our chief economics correspondent Nick Timuros, who told us that less guidance could mean not publishing the Federal Reserve's so-called dot plot, which maps out where rates are headed. Warsh's instinct is to keep his options open and not commit to a path. The irony is that he's walking into a moment when markets are desperate for clarity, and the tool that he's most skeptical of, the dot plot, could end up sending the louder signal of everything the Fed produces this week.

2:06So the thing I'm watching isn't just what the Fed does, it's how much Warsh is willing to explain about why and whether his first act as chair is to start pulling back the very guidance he's criticized. Though Nick said the real tension here is whether Warsh will move to cut rates, even though inflation is running near 4%. The president shows Warsh expecting lower interest rates, but the committee he's inheriting has moved the other way. They're making the case against raising rates. So Warsh is in a box. The data and his own committee are pulling one way. The president who appointed him is pulling the other.

2:44He's not going to cut interest rates into 4 % inflation just because the president wants it. No serious central banker can do that and keep their credibility. The more interesting question isn't even whether they cut. It's how far do Fed officials go this summer towards entertaining raising rates? That was the Journal's Nick Timmeros. The Fed's interest rate decision is due at 2 p.m. Eastern. And you can check out WSJ.com for live coverage throughout the day. Well, turning to last night's primaries, Trump-backed representative and trucking business entrepreneur Mike Collins has won a GOP Senate runoff in Georgia, teeing him up to take on incumbent Democrat John Ossoff in the general election.

3:28Here was Collins celebrating last night. The truth is, this is the truth, we need more business people in Washington who know how to get things done, and that's exactly what I've done in the two short years I've been up there. The Collins-Ossoff face-off is set to be one of the country's key battleground races. And to learn how health care could be a deciding issue in that contest, check out the latest episode of What's News Sunday, which we've left a link to in our show notes. Well, in another statewide race in Georgia, Trump's endorsement failed to deliver victory to Lieutenant Governor Burt Jones in a competitive GOP gubernatorial primary.

4:05Voters instead backed billionaire Rick Johnson, who will face off against Atlanta Mayor Keisha Lance Bottoms in November. And in Washington, D.C., Janice Lewis-George is leading the vote count in a crowded Democratic mayoral primary. As we said yesterday, President Trump has said he would consider a federal takeover of D.C. should the progressive Democrat become mayor. Federal prosecutors have charged at least five people in connection with a plot to attack last Sunday's UFC cage-fighting match at the White House. According to court records, the group had hoped to detonate explosive-laden drones, causing a panic, and then to shoot into the crowd as people fled.

4:44Speaking on Fox News' The Five, Vice President J.D. Vance downplayed the risk posed to attendees and said that he and President Trump only learned about the plot yesterday. And it turns out the plot was like not that advanced. They weren't in town. They had not really done that much planning. And so I get why people are so fascinated by it. I do think the political violence and rhetoric in this country is completely out of control. But thank God we've got good law enforcement, good FBI, because it didn't even get close to the point of execution. The FBI learned about the alleged plot four days before the event after a tip-off by a concerned mother.

5:21And we are exclusively reporting that the Trump administration is warning all 50 states to comply with a federal anti-fraud campaign or risk losing funding for unemployment insurance benefits. The administration alleges that those benefits have become an easy fraud target in the aftermath of the pandemic, and the latest move follows a similar warning delivered to state Medicaid programs last month. Coming up, China's Instagram prepares for an IPO, and we'll dig into the campaign to save a British condiment favored by the elite for almost 200 years. Those stories and more after the break.

6:25We'll see you next time. NYSE SIPC.

6:32In markets news, Chinese social media app Chow Hongshu is aiming to IPO in Hong Kong as soon as this year, targeting a more than$70 billion valuation. Known as Red or RedNote internationally, the so-called Chinese Instagram has more than 400 million monthly active users. That user base is mainly Chinese-speaking, though the app captured a wave of American TikTok users early last year when TikTok faced a ban in the U.S. European auto shares fell this morning after BMW slashed its full-year guidance on the back of worsening performance in the Chinese market and the knock-on effects of the Iran war.

7:12BMW's stock slid more than 6%. The German automaker said it would now intensify and accelerate its cost-cutting plans, which it said would become visible in the coming year. And as U.S. companies hunt for cash to fund their AI ambitions, many are turning to an obscure corner of the bond market. So far this year, U.S.-listed companies, including CoreWeave and Microchip Technology, have issued about$54 billion worth of convertible bonds, which investors can convert into stocks if the shares climb to a designated price. That is a 43 % increase from the same period last year, and the highest year-to-date volume since the start of the pandemic.

7:53And finally, as England prepares for its first World Cup match against Croatia later tonight, our Foreign News editor James Hookway reports that the British elite are up in arms as they race to save their favorite relish. Well, gentlemen's relish is a bit of a mystery to the uninitiated. It's mostly anchovies mixed up with a similar proportion of butter and a blend of various spices and herbs added to it to kind of create this concoction that's been profoundly popular amongst the British ruling of elite for nearly 200 years now. James says that the relish's popularity among the elite is part of its downfall, with its manufacturer saying it could no longer justify producing the paste because the market for it wasn't big enough, leaving its admirers to take matters into their own hands.

8:44There's been a lot of wailing and gnashing of teeth over this amongst the people who are kind of used to having it on hand. And it's created a bit of a crisis in some circles. And the Spectator magazine, they managed to get a hold of a small consignment. And one of their editorials suggested they're trying to facilitate discussions between interested investors who might be interested in taking on the brand. The company AB Foods says there have been a number of approaches from outside parties about taking on the brand and continuing production of Gentleman's Relish. Well, unable to track down an imitation of Gentleman's Relish at Fortnum & Mason, yours truly decided to produce what I believe is a pretty convincing version of Gentleman's Relish.

9:28It's got butter and anchovies, of course, good ones from Borough Market, I should say, plus ginger, cinnamon, breadcrumbs, other good stuff. And I have dragged both the podcast team and newsroom friends, Natasha Dengor and Ben Dummitt, into the studio here for a tasting as I read the credits. All right, everyone, dig in. And I will say that's it for What's News for this Wednesday morning. Today's show was produced by Daniel Bach. Vegetarian. Opting out, Daniel? I'm out, yeah. And Hattie Moyer. Oh, I'm not sure. I don't like anchovies. Our supervising producer. This is not going well. Our supervising producer is Sandra Kilhoff.

10:05This is surprisingly Christmassy and fishy. Oh, that's good. And I'm Luke Vargas for The Wall Street Journal. It was a long pause, but I really liked that. And let me swallow quickly. Apologies to everyone with misophonia. We will be back with a brand new show tonight. Until then, hold your condiments close because who knows when they'll be tragically discontinued. And thanks as always for listening. Subtle, I like the subtle taste. Fishy, but I don't get the Christmas angle. Yeah, it's fishy and salty, but I could get behind it. Don't know when I would eat this, like ever. I think it's pretty good.

10:39I feel like it is. It is.

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