Minutes of the Federal Open Market Committee July 28–29, 2026

One sentence here nearly made me fall off my chair: 'On balance, with imports growing faster than exports, net exports continued to subtract from GDP growth.' What? So even the bloody FOMC thinks that imports subtract from GDP growth! GDP is just what is produced in the country, imports are not so they are just not counted in GDP in the first place! If even the FOMC is susceptible to this sloppy thinking, then it is hardly surprising that the American populace is vulnerable to this populist crusade against imports by claiming that they 'subtract from GDP growth'. Also, to correct an error in my thinking since reading the last minutes: I can rest assured that when the inflation numbers report the inflation figures for a certain month, for example total consumer price inflation was 4.1% in May as measured by the 12-month change in PCE, that's an annualized figure. So I don't need to worry about hyperinflation. But still, total consumer price inflation of 4.1% is way off the Fed's target! So far Warsh's tenure hasn't shown any evidence of 'fresh thinking', if anything it just looks a lot like its predecessor, i.e. being way off its inflation target. Anyway a new concept learned here was that real private domestic final purchases 'often provides a better signal of underlying economic momentum than does real GDP'. Warsh still refuses to let us know his reaction function. Not sure if there will be another rate hike this year. A key thing I will look out for is the FOMC's discussion over Bessent's long-dated Treasury buyback program.