Kevin Warsh will chair his first Federal Open Market Committee (FOMC) meeting as Chair of the Federal Reserve on Tuesday, marking the formal end of the Jerome Powell era and the beginning of what could be a notably different approach to US monetary policy.
Nominated by President Trump to succeed Powell, Warsh brings a distinct philosophy to the central bank most powerful position.
What Markets Are Watching
- Rate decision: Markets expect no change
- Balance sheet: Warsh has expressed desire to reduce the Fed $6.6 trillion balance sheet
- Forward guidance: Warsh has criticised detailed forward guidance, may reduce dot plot projections
- Inflation: US inflation at 4.2% in May, path to 2% target uncertain
Market Context
The S&P 500 has risen more than 8% in 2026, extending a multi-year bull run driven largely by AI optimism. A hawkish turn under Warsh could unsettle equity markets accustomed to the accommodative Powell years.
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