Fed leadership/policy: Warsh Chair
Key Questions
What decisions were made at Kevin Warsh's first FOMC meeting?
The FOMC held rates at 3.50%-3.75% unanimously. The dot plot turned sharply hawkish with 9 of 19 participants seeing a rate hike in 2026, and inflation projections were raised.
What changes did Warsh implement regarding forward guidance and the balance sheet?
Warsh eliminated forward guidance and the dot plot, created five task forces, and announced five reforms. The balance sheet rose to $6.725T despite tapering, surprising markets.
What is the next key inflation data point after the FOMC meeting?
The next key catalyst is the May PCE release on June 25. Some contrarian views suggest markets may be over-reading the hawkishness of the policy shift.
Warsh's first FOMC meeting (June 18) held rates at 3.50%-3.75% (unanimous). Dot plot turned sharply hawkish: 9 of 19 see a 2026 rate hike. Inflation projections raised. Warsh eliminated forward guidance and dot plot, created five task forces, announced five reforms. Balance sheet rose to $6.725T despite tapering, surprising markets. Contrarian views (Brooks, Marchioni) suggest market may be over-reading hawkishness; NY Fed official called language cleanup not policy shift. Political tension with Trump. Next key catalyst: May PCE June 25.