Fed Leadership Change: Kevin Warsh as New Chairman, Balance Sheet Inaction
Key Questions
Who is the new Fed chairman and when was he confirmed?
Kevin Warsh was confirmed as Fed chairman and held his first FOMC meeting on June 16-17.
What changes occurred at Warsh's first FOMC meeting?
Forward guidance was suspended, and markets initially priced in two rate hikes before shifting after weak June payrolls data.
What do rate hike probabilities indicate now?
Following the June payrolls miss, the odds of a rate hike collapsed to around 20%, increasing expectations for potential cuts.
When are the June FOMC minutes being released?
The June FOMC minutes, the first full set under Chairman Warsh, are scheduled for release on July 10.
What other Fed-related events are scheduled this week?
Fed Chair Warsh is set to speak, and liquidity operations have signaled a calm approach at quarter-end.
Kevin Warsh confirmed as Fed chairman. After June payrolls miss (57k), rate cut expectations rose. Cool inflation data (PPI flat, CPI in line) pushed rate hike probability to 35%. Warsh has failed to deliver on promised balance sheet reduction for 7+ weeks. The June FOMC minutes are due July 10, and Warsh is scheduled to testify this week.