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3w ago

Warsh to Lead First Fed Meeting as Inflation Nears 4.2%

The June 16–17 meeting will test whether he holds rates, changes how the Fed communicates policy, or yields to President Trump's push for lower borrowing costs.

New Federal Reserve Chairman Kevin Warsh (L) will be under pressure from US President Donald Trump, who nominated him, to lower interest rates despite surging inflation
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Overview

  • Kevin Warsh was sworn in as Fed chair in late May and will chair his first Federal Open Market Committee meeting on June 16–17.
  • U.S. consumer inflation rose to about 4.2% in May, well above the Fed's 2% goal, driven largely by a sharp jump in energy prices tied to the Iran conflict.
  • Most analysts expect the committee to hold the benchmark rate at this meeting, but futures and CME FedWatch now price a meaningful chance of rate increases by year-end.
  • Warsh has proposed reducing Fed forward guidance and published projections and may withhold his personal projection at this first meeting to begin reshaping communications.
  • President Trump is publicly pressing for lower rates, and a divided FOMC that recorded four dissents in April will confront the test of preserving the Fed's independence.