Warsh Faces Biggest Test Yet Amid Trump Pressure
Federal Reserve Chair Kevin Warsh is facing his biggest test yet as he navigates heightened economic anxiety and renewed questions about independence in the Trump era.
Warsh has vowed a much quieter, less interventionist central bank, but an apex of challenges now stands in the way. Chiefly, he faces a standoff with President Donald Trump if he fulfills expectations to make way for a rate increase, a course correction from his prior instinct to keep rates steady.
The chairman will also hold his first press conference following revelations that he and Trump have spoken by phone multiple times since taking the helm of the agency. This comes as the administration is attempting to oust Fed Governor Lisa Cook, a signal of how political pressure that once beset his predecessor is seeping into Warsh's tenure.
Signs that inflation will remain sticky for the foreseeable future are mounting. Hopes of a near-term ceasefire deal with Iran have vanished as the U.S.-Israel war with Iran spirals into a regional conflict, driving up oil prices with the disruption of multiple critical waterways. Renewed urgency in Washington to rein in one of the main drivers of economic growth, artificial intelligence, is also spurring industry angst about the outlook for profits in the sector.