So far, so good: The Warsh era at the Fed gets underway

June 18, 2026 — 11:56am

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Kevin Warsh faced some novel, perhaps unprecedented, challenges as he chaired his first meeting of the US Federal Reserve Board, not the least of which was to demonstrate that he wasn’t Donald Trump’s “sock puppet.”

The Fed’s first statement on monetary policy under its new chair was far more concise than those issued during the tenure of his predecessor Jerome Powell, and lacked the guidance that has been a feature of Fed statements dating back to the aftermath of the 2008 financial crisis.

There was, however, a decidedly “hawkish” tone to it, to Warsh’s own statements and to the signals sent via the famous “dot plot” projections of members of the Federal Open Market Committee (FOMC) that decides US monetary policies.

Appointed by a president who made it abundantly and very loudly clear that he wanted a Fed chair who would deliver lower interest rates, the clear emphasis Warsh placed on “price stability” and an inflation rate that has remained above the Fed’s target for the past five years was a statement of his and the Fed’s independence.

Warsh also needed to show that he could lead a board and FOMC that had been, most unusually for an organisation that traditionally has been driven by consensus, increasingly fractured.

‘The recent past need not be a prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.’New Federal Reserve chair Kevin Warsh

That was, perhaps, because its members wanted to signal their own independence in the face of the vicious verbal and legal attacks by Trump on Powell and another Fed governor, Lisa Cook. Powell’s term as chair ended last month, but he remains on the board until it is apparent that the Trump administration’s legal assault on him and, effectively, on the central bank’s independence, is “well and truly over.”

At each of the Fed’s........

© The Sydney Morning Herald