Warsh to lead first Fed meeting, rates expected to stay unchanged
6 reported3 unconfirmed
The Federal Reserve is set to hold its first policy meeting under new Chair Kevin Warsh on Wednesday, with economists expecting the central bank to keep its key interest rate unchanged at about 3.6% for the fourth consecutive meeting. Warsh, appointed by President Trump, will also hold his first post-meeting press conference, which will be closely watched by Wall Street, economists, and the White House. The Fed may adjust its post-meeting statement to remove language signaling a future rate cut, potentially indicating rates could stay unchanged for an extended period or even rise if inflation remains elevated. Warsh previously served as an investment banker, a Fed board governor from 2006 to 2011, and a visiting fellow at the conservative Hoover Institution. The meeting comes amid an economic environment shaped by the Iran war, which began Feb. 28 and has pushed inflation to a three-year high of 4.2%, driven largely by higher gas prices. Hiring has also picked up, with employers adding 172,000 jobs in May, reducing the rationale for rate cuts. Former Chair Jerome Powell, whose term as chair ended May 15, remains on the Fed’s board of governors and is expected to vote on the rate decision.
What’s reported
The Federal Reserve is expected to keep its key interest rate unchanged at about 3.6% for the fourth straight meeting.
Kevin Warsh will oversee his first policy meeting and hold his first news conference as Fed chair on Wednesday.
Warsh was previously an investment banker, a Fed board governor from 2006-2011, and a visiting fellow at the Hoover Institution.
Inflation has accelerated to a three-year high of 4.2%, lifted mostly by costlier gas stemming from the Iran war that began Feb. 28.
Hiring jumped in May, with employers adding 172,000 jobs, the third straight month of solid job gains.
Former Chair Jerome Powell remains on the Fed’s board of governors and is expected to vote on the rate decision.
Open questions
Whether Warsh will signal future interest rate direction or change Fed communication practices.
Whether the Iran war peace agreement will hold and how long it will take for prices to cool.
Whether the Fed will reduce the number of press conferences per year.
Key figures
Kevin Warsh, Federal Reserve Chair
President Trump
Jerome Powell, former Fed Chair and current Fed board governor
Ben Bernanke, former Fed Chair (mentioned in context of press conference frequency)
Sources: abcnews.com
