Kevin Warsh Takes Fed Helm as Inflation Tops 2% for 5 Years
Updated
Updated · The Washington Post · May 22
Kevin Warsh Takes Fed Helm as Inflation Tops 2% for 5 Years
22 articles · Updated · The Washington Post · May 22
Warsh, 56, was sworn in Friday at a White House ceremony, replacing Jerome Powell as Fed chair just as markets increasingly see the next policy move as a possible rate hike.
Inflation has stayed above the Fed’s 2% target for more than five years and is now being pushed higher by Iran-war-driven energy costs, leaving Warsh little room to deliver the lower rates Trump has demanded.
Powell’s term as chair expired last week, but he remains on the seven-member board through early 2028 — an arrangement unseen in nearly 80 years that could give skeptics of Warsh’s agenda a rallying point.
Trump said he wanted Warsh to be “totally independent,” though the White House ceremony underscored his unusually direct effort to reshape the central bank after threatening Powell and trying to remove Governor Lisa Cook.
A former Morgan Stanley banker and Fed governor during the 2008 crisis, Warsh has criticized the Fed’s post-pandemic policies, recently backed faster rate cuts and wants to shrink its $6.7 trillion balance sheet.
How will Chairman Warsh balance his long-term vision for lower rates against this urgent inflation threat?
With a global oil shock disrupting supply, is raising interest rates the correct medicine?
Kevin Warsh’s Fed: Managing Sticky Inflation, Oil Price Surges, and Institutional Reform in 2026
Overview
Kevin Warsh was confirmed as Federal Reserve Chair after a divisive Senate vote, stepping into the role amid persistent inflation and economic uncertainty. He inherits a challenging landscape, with price pressures remaining high and the Consumer Price Index rising to 3.3% in March 2026. Warsh’s first FOMC meeting is set for June, where he faces the task of balancing inflation control with economic growth. His leadership marks a new era for the Fed, as he must address both internal divisions and public skepticism while navigating complex economic conditions and shaping future monetary policy.