With inflation at a two-year high of 3.3% and unemployment at 4.3%, most of the 12-member Fed committee remain opposed to lowering rates, despite President Trump’s expectations.
Warsh, nominated to replace Jerome Powell, pledged independence at a Senate hearing but offered few specifics on rate direction, while rising gas prices and committee resistance complicate prospects for cuts.
Economists note Warsh’s lack of committee influence and political baggage may delay any policy shifts, with markets now expecting no rate cut until October 2027 unless inflation eases or unemployment worsens.
How could Kevin Warsh deliver expected rate cuts against an inflation-fighting Fed?
How long will high borrowing costs for consumers persist under new Fed leadership?
Will AI's energy demand force the Fed to keep rates high, despite its potential?
How will shrinking the Fed's massive balance sheet affect markets and the economy?
Are war and tariffs the real drivers of today's high inflation, not Fed policy?
Could Jerome Powell remain a Fed governor to safeguard its independence from his successor?