Warsh Sets a Cautious Course as Fed Faces Inflation Risk

Kevin M. Warsh was sworn in as Federal Reserve chair amid rising inflation and expectations the Fed may raise rates, not cut them, despite President Trump’s push for cuts. He emphasizes independence and a reform-minded approach—critiquing inflation measurement, embracing real-time data, and signaling a potential balance-sheet shrinkage to offset higher long-term rates if price pressures persist. With the labor market holding up and consumer spending buoyant, markets await the June dot plot as policymakers weigh how aggressively to respond.