Kevin Warsh Sworn In as Fed Chair Amid Inflation
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Kevin Warsh was sworn in as the 17th Federal Reserve chair on May 22, 2026, inheriting soaring inflation and a Middle‑East energy shock.
- Trump told Warsh at the ceremony to stay independent and not look to anyone, signaling political pressure for lower rates.
- Waller warned that inflation’s core gauge was about 3.8% YoY in April, the highest in three years, and that the labor market was stabilizing, making immediate cuts unlikely.
- Waller suggested dropping the Fed’s “easing bias” language and warned that successive price shocks can cause inflation expectations to rise, likening it to a series of heads in coin flips.
- Deutsche Bank analysts Matthew Luzzetti and Matthew Raskin warned that the Fed’s rate cuts last year, framed as insurance, might have left policy too loose given solid growth, accelerating inflation, and supportive fiscal conditions.
Why it matters: The Fed’s new leadership must wrestle with inflation that has lingered above the 2% target for five years and an energy shock whose transitory nature is uncertain, meaning borrowers face sustained higher rates while political pressure for cuts is tempered by rising inflation expectations and a hawkish shift among officials.
