Kevin Warsh takes over the Federal Reserve as markets reassess rate-cut bets following hotter-than-expected inflation data.
The Senate confirmed Kevin Warsh as the next Federal Reserve chair in a 54-45 vote, the most contentious confirmation in the central bank’s history. Warsh, 56, replaces Jerome Powell, whose term expires Friday, amid heightened scrutiny over monetary policy as inflation remains above the Fed’s 2% target.
Warsh’s appointment follows months of speculation and a crowded field of candidates, including current Fed Governors Christopher Waller and Michelle Bowman. His prior tenure at the Fed from 2006-11 coincided with the subprime mortgage crisis, a period marked by initial missteps before aggressive policy responses. Recent inflation reports show pipeline pressures at three-year highs, complicating the case for rate cuts.
Markets have adjusted expectations, scaling back bets on rate reductions and pricing in a potential hike later this year. President Donald Trump has publicly urged Warsh to lower rates, criticizing Powell’s restrictive policies.