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4h ago

Warsh Presides Over First Fed Meeting as Markets Track His Tone

Markets expect a rate hold and will judge Warsh’s first public remarks for signs he will favor tighter policy or the deep cuts President Trump has pushed for.

Renovation work continues on the Marriner S. Eccles Federal Reserve Board Building, the main offices of the Board of Governors of the Federal Reserve System on December 9, 2025 in Washington, DC.
A driver fills up his vehicle at a gas station in Wiggins, Colorado, on May 11, 2026.
The new Chairman of the Federal Reserve Kevin Warsh departs the East Room of the White House after a swearing in ceremony in Washington, DC on May 22, 2026. The US Senate confirmed Kevin Warsh as the new Federal Reserve Chairman on May 13 to lead a central bank whose independence is under attack and with inflation at a three-year high.
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Overview

  • The Federal Reserve opened its two-day policy meeting on Tuesday, and officials are widely expected to leave the federal funds rate at 3.50 to 3.75 percent.
  • Warsh will hold his first post-meeting press conference, making his public tone and any changes to forward guidance the main signal about the Fed’s future path.
  • Inflation remains well above the Fed’s 2 percent goal with CPI at about 4.2 percent year over year and the PCE measure the Fed prefers near 3.8 percent, which limits room for near-term rate cuts.
  • President Trump has publicly pushed for large rate cuts to around 1 percent, a stance that creates political pressure and raises questions about the Fed’s independence given Warsh’s narrow confirmation and Mr. Powell’s continued role on the Board.
  • Warsh’s stated plans to shrink the Fed’s roughly $6–7 trillion balance sheet and to give less detailed guidance could raise market volatility and push bond yields higher, which would increase borrowing costs for households and businesses.