Good morning! Today is Sunday, May 17th 2026, and this is The American Conservative's Morning Brief. Kevin Warsh takes the Fed chair with an inflation problem that won't quit and a president who wants cheap credit, and David Brady warns the easy-money path is inflating an AI bubble that could end in taxpayer-funded bailouts. At a Florida commencement, students jeered an executive who hailed AI as the next Industrial Revolution, a moment Spencer Neale reads as the most AI-saturated generation signaling it does not want the future being sold to it. Peter Tonguette visits Washington's National Cathedral and a Virginia luxury mall and finds, in the empty shelves of a bankrupt Saks, a quiet parable about the decay of earthly things. and now for the details. We begin this morning at the Federal Reserve, where the appointment of Kevin Warsh as the next chairman is shaping up to be one of the defining economic decisions of the Trump second term. Warsh built his reputation as an inflation hawk. He resigned from the Fed's Board of Governors back in 2011 in protest of a second round of quantitative easing, and he has spent years warning about what he called institutional drift at the central bank. But in recent weeks, a different Warsh has emerged, one who now echoes the president's call for lower interest rates while still insisting he will preserve central bank independence. As David Brady reports for The American Conservative, Warsh inherits an inflation problem that has not gone away. Both the Personal Consumption Expenditures index and the Consumer Price Index have remained above the Fed's 2 percent target since March of 2021. The Producer Price Index hit 6 percent year-over-year last month. Brady argues that the Fed's reluctance to hold the line on interest rates is doing more than eroding wages and savings. It is also, in his view, propping up an artificial intelligence bubble. Companies like OpenAI and Anthropic continue to post losses even as venture capital floods in, sustained by cheap credit. Brady warns that if the Fed continues to cut rates to please the White House, the bill will come due in the form of higher inflation, a sharper bust, and potentially bailouts of Silicon Valley and Wall Street at the expense of the American taxpayer. That AI question is being asked, in much blunter terms, by the generation expected to live with the consequences. At the University of Central Florida's commencement last weekend, Gloria Caulfield, an executive with Tavistock Development, told graduates that the rise of artificial intelligence is the next Industrial Revolution. The line was met not with applause, but with jeers. One student shouted, "AI sucks." When Caulfield noted that AI had barely been a factor in American life only a few years ago, the auditorium cheered. Spencer Neale reports that this was not a fringe outburst. Recent Gallup polling of Americans aged 14 to 29 finds that more than half use AI tools daily or weekly, yet skepticism is rising and optimism is falling. Entry-level jobs in coding, copywriting, design, legal research, and translation are eroding quickly. Neale notes that even older creative professionals are adjusting. Demi Moore told audiences at Cannes that fighting AI is a battle that will be lost. Taylor Swift and Matthew McConaughey have moved to trademark their voices and likenesses against AI impersonation. The students booing in Florida, Neale writes, are not Luddites. They are the most AI-saturated generation in American history, and they are increasingly unsure they want the future being sold to them. From the future of work to the spaces where Americans once gathered. Peter Tonguette took a trip last month to the Washington area with two stops in mind, the National Cathedral and the Tysons Galleria shopping mall in Fairfax County, Virginia. The sacred and the profane, as he puts it. Tonguette finds the cathedral as majestic as expected, but his real meditation is on the mall. He remembers the malls of his New Orleans youth, where his father bought him his first sport coat and his mother chose a cross necklace. At the Galleria, he found a high-end retail experience still humming on a Tuesday afternoon, until he wandered into Saks Fifth Avenue and found the shelves stripped bare, the anchor tenant in bankruptcy and closing its doors. The cathedral, he writes, endures for its eternal truths. Even the fanciest malls are subject to decline and decay, a quiet metaphor for the fate of all earthly things. Overseas, the ceasefire in the Iran War entered its 39th day on Saturday. Harrison Berger reports on a story in the Telegraph, citing anonymous sources, that Trump administration officials have urged the United Arab Emirates to seize Iran's Lavan Island. The report follows Israeli accounts of a secret meeting between Prime Minister Netanyahu, the heads of Mossad and Shin Bet, the IDF chief of staff, and Emirati leadership. The UAE denies the visit took place. In a Fox News intervie
