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3h ago

Kevin Warsh Takes Over as Fed Chair With Powell Staying On as Governor

Stubborn 3.8% inflation with a split rate‑setting committee limits quick policy shifts.

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Kevin Warsh, U.S. President Donald Trump's nominee for Chair of the Federal Reserve, is sworn in to testify during his Senate Committee on Banking, Housing, and Urban Affairs confirmation hearing in the Dirksen Senate Office Building on April 21, 2026 in Washington, DC.
Jerome Powell and then-Treasury Secretary Steven Mnuchin greet each other with an elbow bump during a House Financial Services Committee hearing in Washington, DC, on June 30, 2020.
Powell testifies during a Senate Banking Committee hearing in Washington, DC, on March 3, 2022.

Overview

  • Warsh, confirmed by the Senate this week, took the gavel Friday as Jerome Powell ended his chairmanship yet kept his voting seat on the Federal Reserve Board.
  • Inflation quickened to 3.8% year over year in April following Tuesday’s consumer price report, and Wednesday’s wholesale gauge jumped 1.4% for the month, reinforcing market bets that rate cuts are unlikely soon.
  • Warsh has signaled faster shrinking of the Fed’s $6.5 trillion balance sheet and less forward guidance, but any change to interest rates still requires a majority of the 12 voting members on the Federal Open Market Committee.
  • Powell remains on the board after the Justice Department dropped its criminal probe into Fed renovations, with a possible inspector general review still pending and with Powell citing the need to safeguard the central bank’s independence.
  • Households are feeling the squeeze as Iran‑related energy shocks and new tariffs lift fuel and import costs, wages trail prices, and retailers report buyers delaying big‑ticket purchases.