Warsh wants price stability but the market is calling his bluff! We just tipped into a deflationary backdrop.

The ratio at the bottom of the chart below shows real rates skyrocketing on the FOMC release today. (Nominal Rates vs. Breakeven Inflation). Nominal rates are rising as inflation is falling. If this keeps going higher, financial markets will crash pretty hard as liquidity gets sucked out of the system. Warsh even said policy is restrictive for housing, so he does not want this outco — via @Tyler_Neville_

Market calls bluff on Warsh's price stability as FOMC release shows real rates spiking on deflation.