Kevin Warsh Takes Oath as 17th Fed Chair as Inflation Stays Hot and Markets Reprice Rate Outlook

Kevin Warsh was sworn in as the 17th chair of the U.S. Federal Reserve, succeeding Jerome Powell, according to CoinDesk. The leadership change lands as inflation remains well above the Fed's goal, energy costs climb, and investors reassess where interest rates are headed. The report cited April U.S. inflation at 3.8%, still notably above the central bank's target. AAA data show the national average gasoline price has risen to $4.55 a gallon, adding to household energy burdens. Geopolitical tensions involving Israel and Iran have also increased volatility in energy markets, feeding broader inflation pressure. Federal Reserve meeting minutes indicate officials have grown more cautious on the inflation outlook and are not ruling out a tighter policy stance if price pressures persist. Market expectations have shifted as well. Based on market commentary cited by CoinDesk, investors are now assigning a 43% probability to another rate hike before 2027, near the highest level in recent months. That pricing contrasts with President Donald Trump's earlier remarks expressing a preference for the new chair to support rate cuts. Warsh was nominated by Trump and was sworn in at the White House. Trump, who attended the ceremony, said he hoped Warsh would carry out his duties independently and suggested he could become one of the most powerful Fed chairs in U.S. history. Democrats quickly criticized the appointment. Senator Elizabeth Warren said after the ceremony that Warsh's credibility was already damaged as he took office, arguing he was too closely aligned with Trump. She also raised questions about Warsh's private investment arrangements, saying he did not disclose the source of a $100 million investment and related financial interests. Concerns about Fed independence were also a theme during confirmation hearings. Some Democratic lawmakers said Warsh avoided answering questions at an April hearing about whether Trump lost the 2020 election, adding to doubts about his ability to maintain policy independence under political pressure. In his inaugural remarks, Warsh said the Fed would pursue reforms under his leadership and argued that, with appropriate policy management, inflation should ease, growth could strengthen, and households' real disposable income may improve. He did not outline a clear interest-rate path on the day he was sworn in. Markets are expected to focus on upcoming inflation and employment data, along with Warsh's first FOMC meeting as chair, for clues on policy direction. The minutes suggest policymakers remain divided: some officials favor removing language indicating "the next move is more likely to be a cut," while others still see room for rate cuts if inflation continues to move toward target or the labor market weakens. Warsh's immediate task is to build consensus as the Fed navigates elevated inflation, political scrutiny, and split market expectations. Early decisions will shape perceptions of whether the central bank holds rates steady, pivots toward cuts, or reconsiders tighter policy.