Kevin Warsh Fed Chair Sworn In Amid Inflation

Kevin Warsh was sworn in as the Federal Reserve’s 17th chair at a White House ceremony presided over by President Donald Trump. He assumes the role as inflation rises and the Fed’s April minutes signal a shift toward possible policy firming.

White House Ceremony and Transition

The U.S. Senate confirmed Warsh to succeed Jerome Powell as chair on May 13, 2026. Warsh took office with a four-year term as chair and a 14-year term as a Federal Reserve governor. Powell’s term as chair ended the prior week, but he remains on the Board as a governor through January 2028. The Federal Reserve designated Powell chair pro tempore until Warsh’s swearing-in.

President Trump presided over the ceremony, marking the first Fed chair swearing-in at the White House since 1987 and the first attended by a sitting president since 2006.

Inflation Pressures and FOMC Debate

The Federal Open Market Committee (FOMC) left the benchmark federal funds rate unchanged at its April meeting. The minutes revealed sharp divisions among officials, with a majority noting that “some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent.” Many participants preferred removing language suggesting an easing bias, reflecting concerns about elevated upside inflation risks and downside employment risks. The minutes also highlighted the Middle East conflict’s significant implications for the policy path.

Recent inflation readings place producer-price inflation at 6.0%, consumer-price inflation at 3.8%, and the Fed’s preferred personal-consumption expenditures (PCE) gauge at 3.5%. The acceleration is linked to the war with Iran and a spike in energy costs, including concerns about the Strait of Hormuz. These levels leave little room for an aggressive pivot toward easier policy unless growth weakens sharply or inflation cools convincingly.

Futures markets price nearly a 50% chance of at least one 25-basis-point rate hike as the next move. Before the Iran-related energy shock, most economists expected at least one rate cut in early 2026. Some analysts caution that markets may be overpricing tightening, as the Fed faces a high bar to raise rates without risking economic growth.

Warsh has long advocated lower interest rates and a smaller Federal Reserve balance sheet, aligning with the White House’s push for easier financial conditions. During his confirmation, he echoed administration priorities while pledging to preserve the Fed’s independence. His selection signals potential sympathy for rate reductions and balance-sheet shrinkage, increasing scrutiny over the central bank’s autonomy.

Some Fed officials and staff have expressed growing concern about financial markets and associated risks to the broader economy as Warsh prepares to lead.

Warsh is scheduled to chair the FOMC’s next policy meeting on June 16–17, 2026.