Kevin Warsh confirmed to lead Federal Reserve

Kevin Warsh has been confirmed as the 17th leader of the Federal Reserve , becoming America's economist-in-chief at a moment of resurgent inflation, public discontent with the economy and unprecedented attacks on the Fed's independence. Driving the news: Warsh was confirmed to a four-year term as Fed chair Wednesday by a 54-to-45 Senate vote. He received unanimous support from Republicans but only one "aye" vote from a Democrat, John Fetterman of Pennsylvania. Warsh takes the helm of the central bank after Jerome Powell's term ends Friday. The big picture: Warsh has promised sweeping change at an institution that he argues has grown too unwieldy and inclined to intervene in the economy. He inherits buoyant financial markets and an AI-driven growth surge — as well as the legacy of five straight years of elevated inflation that has spiked again due to the Iran war. High prices and affordability concerns have driven consumer sentiment indicators to recessionary levels, despite a low unemployment rate and solid GDP growth. Friction point: President Trump has demanded that the Fed cut interest rates, and Warsh has previously laid out an intellectual case for doing so premised on a 1990s-style boom in America's supply potential. But in recent weeks — including April inflation data the last two days — evidence has pointed toward price pressures being resurgent and the labor market holding up, which undermines the case for rate cuts. Indeed, if he seeks rate cuts anytime soon, Warsh will face an uphill battle with his fellow members of the Fed policy committee, who jointly make those decisions. Zoom out: The debate over interest rates will occur against a backdrop of historically unique threats to the Fed's ability to act without regard to political influence. A Supreme Court case over whether Trump can fire Biden-appointed governor Lisa Cook is pending. Powell is remaining on the Fed Board of Governors, contrary to modern precedent, due ...

Original source: Axios