Warsh Fed Holds Rates

The Fed kept rates unchanged as Warsh's chairmanship begins amid policy uncertainty.

Here are the five big takeaways from Kevin Warsh's first meeting as Fed chairman

Fed leaves interest rates unchanged, for now

Trump Gave His Fed Pick One Job. About That …

Summary

Center & Right

A neutral summary of the key facts most outlets agree on, drawn from reporting across the political spectrum.

The Federal Reserve kept its benchmark interest rate unchanged at 3.5% to 3.75% in Kevin Warsh’s first policy meeting as chair, extending a run of steady-rate decisions despite President Donald Trump’s pressure for cheaper borrowing. Policymakers cited inflation still running above the Fed’s 2% target, uncertainty tied partly to conflict in the Middle East and a still-expanding economy as reasons to wait. The decision was unanimous, but updated projections showed a more hawkish tilt, with nearly half of officials open to at least one rate increase later, including forecasts pointing to a possible hike in 2026. Warsh, who succeeded Jerome Powell in May, declined to submit his own rate forecast, adding uncertainty to how aggressively the new Fed leadership may respond if inflation persists.

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Trump Pressure

Warsh’s refusal to cut rates immediately put him at odds with Trump, who had picked him after growing frustrated with Powell’s reluctance to ease policy. Trump publicly shrugged off the decision, but critics framed the hold as an early test of whether the new chair would preserve Fed independence despite White House pressure.

Market Selloff

Stocks fell after the Fed held rates steady but signaled possible future hikes, with the S&P 500 sliding 1.2% during and after Warsh’s first news conference. The drop marked the worst first “Fed day” market performance for a new chair since 1994, underscoring investor concern that policy may stay tighter for longer.

Hawkish Fed Reset

Warsh used his first meeting to signal a tougher inflation-fighting regime, telling reporters the committee would “deliver price stability” while removing language that had suggested a bias toward future cuts. He also shortened the Fed’s policy statement sharply, emphasized a quieter and more restrained communications style, and launched initiatives that analysts saw as the start of a broader institutional overhaul.