Overview
- Warsh took the oath on May 22 at a White House ceremony that broke recent convention and heightened questions about the Fed’s political distance from the president.
- Jerome Powell stepped down as chair but will remain on the Fed’s Board of Governors as a voting member, creating an unusual overlap in leadership.
- The Senate confirmed Warsh by a narrow 54–45 vote after a partisan fight that left many Democrats publicly skeptical of his independence.
- Warsh inherits a difficult policy backdrop with inflation running above target, oil prices pushed higher by the U.S.-Israeli conflict with Iran, rising mortgage rates, and mixed views inside the Fed about cutting or raising rates.
- Markets expect policymakers to hold rates at next month’s meeting while investors and officials look for signals on Warsh’s plans to shrink the Fed’s balance sheet and tighten rules on public guidance, moves that could affect borrowing costs and household prices.