Yesterday’s 25-basis point hike was exactly what this economy needed, even if the White House is throwing a tantrum on Truth Social. As an economist, I’m tired of hearing that 4% is 'restrictive.' It isn’t. We’ve been living in a fantasy land of artificial accommodation for years, and it’s about time the Fed prioritized price stability over political optics.

Warsh’s performance at the press conference was refreshing. Calling this a 'removal of accommodation' rather than a tightening cycle shows he understands that the neutral rate has shifted higher. With PCE inflation stubbornly at 3.7% and the 10-year yield hovering around 5%, the market is finally pricing in reality.

We need to stop coddling speculative tech and zombie companies that only survive on sub-3% rates. If your business model can’t handle a 4% federal funds rate in a 2.3% growth environment, you don’t have a business—you have a hobby. Let’s get back to meritocratic capital allocation. It’s better for the dollar, better for long-term growth, and essential if we ever want to see 2% inflation again.