US EditionEconomic Conditions May Delay Interest Rate Cuts Under Prospective Fed Chair Warsh
Inflation has climbed to 3.3% and most Fed officials are reluctant to cut rates, limiting Warsh’s room to deliver Trump’s preferred easing.
- At his Senate nomination hearing on Tuesday, Kevin Warsh pledged independence from White House pressure but offered few specifics on interest-rate policy. President Donald Trump nominated Warsh to succeed Federal Reserve Chair Jerome Powell, whose term ends May 15.
- Inflation spiked to a two-year high of 3.3% in March after the Iran war disrupted oil exports, complicating the Federal Reserve's path to lower rates. This supply shock pushed energy prices higher.
- As one of 12 voting members on the Federal Open Market Committee, Warsh faces hurdles including his historically hawkish record and desire to shrink the central bank's $6.7 trillion balance sheet. Analysts suggest his approach favors extended holds over rate cuts.
- While President Trump insisted that "when Kevin gets in, I do … interest rates should be much lower," Wall Street investors currently see little chance for a rate cut until October 2027. This divergence signals tension between political expectations and economic data.
- Economists warn that Warsh's stated outlook is much more consistent with an extended hold than additional cuts, potentially setting him on a collision course with market participants. His influence remains uncertain as he balances economic data against persistent political pressure for easing.
40 Articles
40 Articles
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Associated Press News
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The Federal Reserve is likely to hold steady on interest rates at its next Federal Open Market Committee (FOMC) meeting. The hawkish expectations come despite the Trump nominee Kevin Warsh taking over. Markets are pricing in a slow and steady approach from policymakers with no expectations for rate cuts until late 2027. Ad Ad FOMC The post FOMC Meeting: US Fed Expected To Hold Rates Till 2027 Despite Kevin Warsh Taking Charge appeared first on C…
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