defying

The very first act of the new Bush administration was to have a Protestant Evangelist minister officially dedicate the inauguration to Jesus Christ, who he declared to be “our savior.” Invoking “the Father, the Son, the Lord Jesus Christ” and “the Holy Spirit,” Billy Graham’s son, the man selected by President George W. Bush to bless his presidency, excluded the tens of millions of Americans who are Muslims, Jews, Buddhists, Shintoists, Unitarians, agnostics and atheists from his blessing by his particularistic and parochial language.

The plain message conveyed by the new administration is that George W. Bush’s America is a Christian nation, and that non-Christians are welcome into the tent so long as they agree to accept their status as a tolerated minority rather than as fully equal citizens. In effect, Bush is saying: “This is our home, and in our home we pray to Jesus as our savior. If you want to be a guest in our home, you must accept the way we pray.”

But the United States is neither a Christian nation nor the exclusive home of any particular religious group. Non-Christians are not guests. We are as much hosts as any Mayflower-descendant Protestant. It is our home as well as theirs. And in a home with so many owners, there can be no official sectarian prayer. That is what the 1st Amendment is all about, and the first act by the new administration was in defiance of our Constitution.

This was surely not the first time in our long history that Jesus has been invoked at an official governmental assembly. But we are a different and more religiously diverse nation than we were in years past. There are now many more Muslims, Jews, Buddhists and others who do not accept Jesus as their savior. It is permissible in the U.S. to reject any particular theology. Indeed, that is part of our glorious diversity. What is not acceptable is for a presidential inauguration to exclude millions of citizens from its opening ceremony by dedicating it to a particular religious “savior.”

Our first president, George Washington, wrote to the tiny Jewish community in Rhode Island that in this new nation, we will no longer speak of mere “toleration,” because toleration implies that minorities enjoy their inherent rights “by the indulgence” of the majority. President Bush should read that letter and show it to the Rev. Franklin Graham, who told the media on the day before the inauguration that his prayer “will be for unity”; instead, it was for the Trinity. Uniting for Jesus may be Graham’s definition of unity, but it is as un-American as if a rabbi giving the official prayer had prayed for the arrival of the “true Messiah,” thus insulting the millions of Christians who believe Jesus is the true Messiah.

Inaugurations are not the appropriate setting for theological proclamations of who is, and who is not, the true Messiah. Perhaps at Bob Jones University it is appropriate for an honorary degree recipient to declare Jesus to be the only king of the United States, but the steps of the Capitol should not be confused with the lectern of a denominational church.

The inauguration ended with another Protestant minister inviting all who agree that Jesus is “the Christ” to say, “Amen” (ironically, a word that originated in Jewish prayer or, alternatively, originally a Jewish acronym for “God, the King, forever.”) Sen. Joseph Lieberman (D-Conn.), along with many others who do not believe that Jesus is the Messiah, was put in the position of either denying his own faith or remaining silent while others around him all said, “Amen.” This is precisely the position in which young public school students are placed when “voluntary” prayer is conducted at school events. If they join in prayer that is inconsistent with their religious beliefs, they have been coerced into violating their conscience. If they leave or refuse to join, they stand out as different among their peers. No student should be put in that position by their public schools at an assembly, just as no public official should be placed in that situation by their government at an inauguration.

If George W. Bush wants all Americans to accept him as their president, he made an inauspicious beginning by sandwiching his unity speech between two divisive, sectarian and inappropriate prayers.

Kevin Warsh has broken away from US President Donald Trump in his first Fed move, and he has done it with the entire committee behind him.

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The Federal Open Market Committee lifted rates on Wednesday after holding them at 3.5% to 3.75% since December, ending a pause that had grown harder to justify as energy costs pushed prices higher.

Not a single member dissented in a unanimous 12-0 vote.

That matters because the pressure ran in both directions as three regional presidents had voted for a hike in July, while the White House spent months demanding cuts.

Nobody voted for either extreme.

At the time of writing, the market reaction to the decision has been fairly muted likely due to the fact that the hike was widely expected.

A statement stripped to the bone

The Fed’s communication was as striking as its decision.

The statement ran to three short paragraphs, a fraction of the length markets are used to, with no forward guidance and no hedging.

“Inflation remains elevated,” it read, adding that “today’s policy action will support a timelier return to the Committee’s 2 percent goal.”

The word “timelier” carries an implicit admission that the return had been too slow.

Then a sentence the Fed almost never writes: “The Committee will deliver price stability.” Not seeks to, not is committed to. Will.

The economic assessment was also confident throughout.

Activity is “expanding at a solid pace”, domestic spending “has been resilient”, productivity growth is “strong” and capital investment “robust”, while job gains “have kept pace with the workforce”.

Uncertainty remains elevated, the Fed said, owing partly to “geopolitical developments”, its formulation for the Iran war.

By describing an economy in good health, the committee removed the argument that higher rates would damage growth, which is precisely the case US President Donald Trump has been making.

Boxed in by the data

The decision had been building for months.

Three regional Fed presidents dissented in July in favour of an increase, the most in one direction since 2016, and several others said afterwards they were ready to move unless inflation eased which it did not.

The Fed’s preferred gauge, the personal consumption expenditures index, ran at 3.7% in both June and July, with core inflation at 3.3%. Before the Iran war sent fuel prices climbing, core stood at 3%.

Consumer prices held at 3.4% in August, but the monthly increase of 0.4% was the sharpest since May, evidence the energy shock is feeding through. Inflation has now been above the 2% target for more than five years.

Warsh had effectively committed himself at Jackson Hole in August, telling the symposium he “would be hard pressed to describe broad financial conditions as restrictive” and warning that unless underlying inflation moved to target “clearly and at sufficient speed”, the Fed had “work to do”.

Markets took him at his word as the CME’s FedWatch tool put the probability of a rate hike above 90% before today’s decision.

Defying the president who chose him

US President Donald Trump had spent months demanding the opposite, insisting the country should have the lowest interest rates in the world and choosing Warsh partly on the expectation he would deliver them.

Warsh himself said while campaigning for the job that rates could come down.

The treatment of his predecessor sharpened the stakes as Jerome Powell was publicly attacked for moving too slowly, and the US Justice Department opened a criminal investigation into testimony he gave to Congress.

Today’s decision could also have a restoring effect on the perceived independence of the Federal Reserve as an institution.

The technical details point to a Fed settling in at the new level.

The interest rate on reserve balances rises to 3.90% from Thursday, the primary credit rate to 4%, and standing repurchase operations will run at 4%. Seven regional reserve banks requested the discount rate increase.

The Fed’s new dot plot shows 12 of 18 officials expect another 0.25% hike by year-end, taking rates to 4.125%, while four see rates reaching 4.375%.

The hawkish signal extends well beyond 2026 as 14 officials see rates ending 2027 above today’s level, while the 2028 median stands at 3.9% versus 3.4% expected.

The longer-run rate also rose to 3.2%, suggesting officials increasingly believe neutral rates have moved higher while economists also expect more to follow.