Hot or not? The economy’s fate rests on Kevin Warsh’s answer to one key question
Fortune Eva Roytburg
Federal Reserve chair Kevin Warsh is set to decide whether the U.S. economy is overheating after markets priced a Fed rate hike for Wednesday. The 10-year Treasury yield has pushed above 5%, around its highest level since 2007. The decision will determine whether the move is treated as a one-time adjustment or the start of a new tightening cycle, especially given competing views that inflation stems either from supply shocks (including oil and tariffs) or from excess demand tied to deficits and AI investment.
Why it matters
Oil near $110, 5% Treasury yields, an AI investment boom and stubborn inflation have revived a question the Fed hasn’t faced in years: Is America overheating?
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