Key insights:
- Kevin Warsh won Senate confirmation as Fed chair after a narrow 54-45 vote on Wednesday.
- Jerome Powell will leave the chair role but remains on the Fed board through January 2028.
- Warsh faces inflation pressure as markets now resist rate cuts demanded by Trump.
- His first FOMC meeting comes on June 16-17, with new Fed projections also due.
Kevin Warsh is taking over the Federal Reserve after a sharply split Senate vote. The U.S. Senate confirmed Warsh as the next Fed chair in a 54-45 vote on Wednesday.
He will replace Jerome Powell, whose term as chair ends this week. Powell will remain on the Fed board as governor through January 2028. Reports said Sen. John Fetterman was the only Democrat to back Kevin Warsh.
Kelvin Warsh Wins Senate Confirmation After Close Vote
The vote gave President Donald Trump a new Fed chair at a tense point for the U.S. economy. Warsh, 56, previously served on the Federal Reserve Board from 2006 to 2011. He also worked at Morgan Stanley and served as an economic adviser under President George W. Bush.
Kevin Warsh has called for regime change at the central bank. His comments included support for faster balance-sheet reduction and closer collaboration with the Treasury. Senators split sharply over his nomination, as Fed independence remained a central issue in the debate.
The confirmation also closes a long chapter under Powell. Powell led the Fed through the pandemic, high inflation, and several rate cycles. He will stay on the board, although he will no longer lead policy meetings.
Markets Watch Warsh’s First FOMC Meeting
Warsh’s first Federal Open Market Committee meeting as chair is set for June 16-17. The Fed calendar shows that the meeting will include new economic projections and a press conference. That gives markets an early test of Warsh’s policy message.
Reuters reported that markets are not pricing in the rate cuts Trump has demanded. Traders now expect steady rates, while some see room for a future hike if inflation stays firm.
Kelvin Warsh will also start the role as energy and inflation concerns remain in focus. Reports tied part of the pressure to the Iran conflict and higher producer prices. That backdrop may limit room for a fast policy shift, even with new leadership at the Fed.
