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The war in Iran has caused oil prices to spike, prompting concerns about a resurgence of inflation. That has led Federal Reserve officials to raise the possibility that they may pause the Fed’s recent efforts to lower interest rates, or potentially even raise rates.
But that is the Fed as it’s now known. The central bank is likely to soon have a new leader who sees inflation very differently. Kevin Warsh, if confirmed by the Senate, would almost certainly be comfortable lowering rates despite a spike in oil prices.
Warsh is President Donald Trump’s nominee for the next chair of the Federal Reserve. He would replace Jerome Powell, whose term expires May 15. Trump officially sent Warsh’s nomination to the Senate on Wednesday.
Warsh said in the run-up to his selection that he believed interest rates should be lower than the current federal funds rate of 3.5% to 3.75%, and Trump has made clear he chose Warsh because they share a desire for lower rates.
