Powell Keeps 4-Vote Fed Bloc, Threatening Rate Hikes Under New Chair Warsh

4 articles · Updated · Fox News · May 24

Jerome Powell stayed on the Fed Board after Kevin Warsh was sworn in as chair, preserving a potential four-vote majority that could steer policy despite Warsh holding the top job.
That bloc consists of Powell and three Biden-appointed governors—Philip Jefferson, Michael Barr and Lisa Cook—and could widen if Governor Christopher Waller backs a hawkish turn.
The report argues rate hikes would be a policy mistake because the current inflation risk is tied to an oil-driven supply shock, not overheating demand the Fed can directly cool.
Bond markets are already tightening conditions, with the 30-year Treasury yield above 5% and the 10-year above 4.5%, while April core CPI was 2.8% and core PPI 4.4%.
If Powell-aligned governors and hawkish regional presidents push through hikes, the fallout would likely hit housing, manufacturing, small-business credit and exporters rather than lower energy costs.

Will an unprecedented 'Shadow Chair' at the Federal Reserve ignite a high-stakes battle over interest rates?

Can the Fed fight a supply-side oil shock without causing a recession, defying historical policy lessons?