Kevin Warsh confirmed as Fed chair, faces rate hikes
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- Kevin Warsh confirmed by the Senate on May 13 as Federal Reserve chair, succeeding Jerome Powell.
- Kevin Warsh will chair his first Federal Open Market Committee meeting on June 16‑17.
- Federal Open Market Committee has kept the federal funds rate unchanged at 3.5%‑3.75% for three consecutive meetings despite an April statement hinting at possible cuts.
- Inflation rose 3.8% year‑over‑year in April and 4.2% in May, staying above the Fed’s 2% target.
- Dallas Fed trimmed PCE gauge shows inflation at 2.3% YoY, close to the 2% target, contrasting with the standard PCE reading of 3.8%.
- Warsh proposes a “quieter” Fed, cutting speeches, ending forward guidance, and dropping the dot‑plot forecasts.
- Wall Street welcomed Warsh’s appointment because of his investment‑banking background and 2008 crisis experience.
Why it matters: Farmers and business borrowers benefit from lower rates, but the FOMC’s inflation‑driven bias toward hikes and its reluctance to adopt trimmed inflation metrics keep borrowing costs high, preserving higher loan expenses for the real economy and limiting credit expansion for agriculture and small firms.
