Kevin Warsh confirmed as Fed chair, promising a “regime change”

anticipated reductions in 2026 are now recalibrating, with expectations shifting toward potential rate increases as early as next year. Warsh’s first Federal Open Market Committee meeting as chair is scheduled for June 16–17, and all eyes will be on how he frames the Fed’s next move.

The new chair does have one stabilising factor on his side: a relatively resilient labour market, which reduces pressure for drastic or immediate action. While no Fed official has yet formally advocated for a rate hike, a growing number are beginning to signal that one may be warranted in the months ahead. Warsh will need to navigate this tension carefully, balancing inflation concerns without risking damage to employment.

Powell stays on — but in the background

Adding an unusual dimension to the transition, outgoing chair Jerome Powell has confirmed he will remain at the Federal Reserve as a governor until January 2028. Powell indicated he intends to keep a “low profile,” though his continued presence could create an awkward institutional dynamic as Warsh moves to implement his promised reforms. The handover marks a significant shift in monetary philosophy at the world’s most influential central bank, and economists and markets alike will be watching closely to see how swiftly — and how drastically — Warsh’s “regime change” takes shape.