Overview
- President Donald Trump told NBC News he would not have chosen Kevin Warsh if Warsh wanted to raise interest rates, signaling the White House expects easing.
- Fed funds futures still imply two cuts this year, but pricing shows limited conviction as investors await clearer guidance on a Warsh-led policy path.
- Democratic Senator Elizabeth Warren is mobilizing opposition over Fed independence, and Republican Senator Thom Tillis says he may block confirmations until Justice Department probes of Jerome Powell and Lisa Cook are resolved.
- Analysts remain split on Warsh’s priorities: he has criticized quantitative easing and favors a smaller Fed footprint, yet he has argued AI-driven productivity could justify lower rates.
- Goldman Sachs projects two rate cuts in 2026 and does not expect a major balance-sheet reduction under Warsh, while Reuters notes he frames policy rules as “aspirational” and is likely to proceed pragmatically in any reforms.