Kevin Warsh Seen Favoring Rate Hikes as $90 Oil and 172,000 Jobs Stoke Inflation
Updated
Updated · 24/7 Wall St. · Jun 8
Kevin Warsh Seen Favoring Rate Hikes as $90 Oil and 172,000 Jobs Stoke Inflation
3 articles · Updated · 24/7 Wall St. · Jun 8
Summary
Kevin Warsh is widely expected to lean toward interest-rate hikes rather than cuts as he begins his Fed tenure, with analysts seeing little room for easing in the current backdrop.
$90-a-barrel oil, risks of $150-$160 crude if Strait of Hormuz disruptions worsen, and lingering inflation are driving that view by raising fears of another price surge.
May payrolls added 172,000 jobs, reinforcing the case that the labor market remains strong enough for tighter policy and making a near-term rate cut look unlikely.
Markets have already reacted as if policy will stay hawkish: the Nasdaq 100 fell 4.8% in one session, with tech stocks taking the brunt of the selloff.
Warsh now faces a political test as well as an economic one, balancing Fed independence against President Trump's preference for lower rates while trying to avoid renewed inflation.