- The U.S. Senate on Wednesday approved Kevin Warsh as chair of the Federal Reserve, putting the 56-year-old lawyer and financier at the helm as the U.S. central bank grapples with intensifying inflation that may make it hard to push through the interest-rate cuts that President Donald Trump has demanded.
The Republican-majority body had on Tuesday confirmed Warsh to a 14-year term on the Fed’s seven-member Board of Governors.
His swearing-in to both positions awaits final White House signatures on paperwork sent by the Senate. Warsh will take the leadership baton from Fed Chair Jerome Powell, whose term ends on Friday but who will remain a Fed governor. Fed Governor Stephen Miran, currently the central bank’s biggest advocate of rate cuts, will vacate his spot on the board to make room for Warsh.
Fed faces mounting inflation concerns
Expected to be in place to chair the Fed’s next meeting June 16 to 17, Warsh joins a central bank whose policymakers are engaged in a vigorous debate on the direction of interest rates.
Several central bankers have argued that the Fed should consider rate hikes, concerned that inflation is broadening even beyond the impact of the Trump administration’s tariffs and the spike in oil prices from the Iran war.
An index of producer prices, a key component of overall inflation, jumped 6% in April from a year earlier, the Labor Department reported on Wednesday. That’s the fastest pace since December 2022 when the Fed was battling a 40-year record surge in prices with sharp rate hikes.
Analysts expect the Personal Consumption Expenditures price index to have risen 3.8% last month, moving further from the Fed’s target of 2%.
In the run-up to his first meeting, Warsh may have to navigate a divided group of policymakers with growing support for more hawkish language indicating that a rate increase is as likely as a rate cut in coming months. At least five of the Fed’s 19 policymakers have said they wanted that change as of April.
Also in June, Fed policymakers are scheduled to release fresh rate-path forecasts. March’s projections for a single rate cut this year look increasingly stale as the unemployment rate hovers around 4.3%, indicating the labor market may not need the support of a rate cut. However, inflation has continued to gain steam: a government report on Tuesday showed consumer prices rose in April at the fastest pace in three years.
Financial markets now expect no change to the Fed’s 3.5%-3.75% policy rate target this year, with a rate hike as soon as January.
Warsh inherits politically charged Fed environment
Warsh is no stranger to discord within the Fed. As a Fed governor during Ben Bernanke’s tenure as chair, he expressed reservations about policy, though he left the Board in 2011 before ever casting a dissenting vote.
At his confirmation hearing he told senators he welcomes a “family fight” at the Fed as policymakers hammer out the right monetary policy response to economic conditions.
Unlike during Warsh’s first stint at the Fed, the current president has been badgering the central bank for rate cuts.
Trump has also undertaken what Powell calls a “series of legal attacks” on the central bank, including an attempt to fire Fed Governor Lisa Cook last year. Trump’s Department of Justice also launched a criminal investigation of Powell which it has dropped for now but has left the door open to reviving.
Powell and others have said those attacks threaten the Fed’s ability to set interest rates according to economic fundamentals. Powell has opted to buck tradition and stay on at the Fed beyond the end of his chair term, at least until the DOJ probe is definitively closed.
Different inflation backdrop from Warsh’s previous Fed tenure
Warsh also faces a different inflation backdrop than he did the last time he was a Fed governor. Then, inflation was mostly running below the Fed’s 2% target, yet Warsh argued that policymakers should tighten financial conditions with a smaller balance sheet.
Trump expects Warsh to advocate for lower rates, and Warsh had expressed support for Trump’s view. Still, he told senators at his confirmation hearing last month that he had not made any promises.
Published on May 14, 2026