Warsh Era Tests Fed Independence as Rates Likely Pause

As Kevin Warsh takes the Fed reins, markets expect the central bank to hold the federal funds rate at 3.5%–3.75% at the June meeting, with no cut unless a new negative shock to jobs or growth emerges; inflation remains above the 2% target across measures, and Warsh’s leadership—including potential shifts in guidance and scrutiny of the Fed’s independence—could keep markets cautious while policy makers await more data.