Kevin Warsh takes over the Fed on Friday

Kevin Warsh is set to be sworn in as chair of the @federalreserve at a White House ceremony this Friday, according to a White House official. The new chair will succeed Jerome Powell, whose term expired Friday but who continues to serve on a pro-tempore basis until Warsh officially takes over.

A Narrow Confirmation

In the most divisive vote ever for a Fed chair, the Senate voted 54-45 to confirm Warsh, ending a monthslong saga that began in the summer of 2025. The vote reflected polarized politics in Congress and Democratic fears that Warsh will bend to President Donald Trump's demands to rapidly lower interest rates. Only Pennsylvania Democrat Sen. John Fetterman crossed over to vote for Warsh, who becomes the 11th Fed chair of the modern banking era.

Warsh's confirmation was delayed after President Trump waged a pressure campaign against the Fed, with the Justice Department launching a criminal investigation of the central bank. Sen. Thom Tillis, R-N.C., initially blocked a committee vote on the nomination to protest that probe, dropping his opposition only after a U.S. attorney agreed to drop the case. Under oath, Warsh vowed he would not capitulate to Trump's demands for lower interest rates.

Rate Cut Hopes Run Into Inflation Reality

Trump has made no secret that he expects Warsh to lower rates after having lashed out repeatedly at Powell for monetary policy the president felt was too restrictive. Markets, however, are not pricing that in. CME FedWatch, which tracks the likelihood of certain monetary policy outcomes, shows a 97 percent chance that rates will remain unchanged at the next policy meeting, with the central bank expected to hold rates at 3.50 to 3.75 percent for the remainder of 2026.

The confirmation comes following reports showing inflation well above the Fed's 2% target and pipeline pressures accelerating at their highest levels in more than three years. Price pressures have increased further since the war with Iran snarled tanker traffic in the Strait of Hormuz, triggering a spike in the cost of crude oil and gasoline. At the last rate-setting meeting in April, three members of the committee hinted their next move could as easily be a rate increase as a cut.

Once seated, Warsh, 56, will become the 11th chair in the modern era as well as the wealthiest person ever to hold the seat, based on financial disclosures he filed ahead of confirmation. His first meeting as chair of the FOMC is scheduled for June 16-17.

Sources:
CNBC: Kevin Warsh to be sworn in as Federal Reserve chair on Friday
CNBC: Kevin Warsh wins Senate confirmation as the next Federal Reserve chair
NPR: Senate confirms Kevin Warsh as next chair of the Federal Reserve