With Kevin Warsh taking the helm at the US Federal Reserve this month, succeeding chairman Jerome Powell, all eyes are on the policies of the hand-picked candidate of President Donald Trump.Generally considered a relatively hawkish policymaker during his time as a Fed governor from 2006 to 2011, the 56-year-old Mr Warsh was nominated by Trump with the perceived goal of having the central bank stimulate the US economy by cutting interest rates.
However, his task is complicated by the war in the Middle East that caused global oil prices to skyrocket, while US inflation has remained above the Fed's 2% target for more than five years.
The US consumer price index (CPI) surged to 3.8% in April, the highest rate in nearly three years, while the producer price index jumped 6%, the biggest increase since December 2022, as costs for goods and services soared during the Iran conflict.
During his confirmation hearing before the Senate Banking Committee on April 21, Mr Warsh said the US economy is still dealing with the ripple effects of a pandemic-driven spike in inflation, adding the Fed needs a different framework for inflation.
WHAT KINDS OF MONETARY POLICIES SHOULD WE EXPECT FROM THE NEW FED CHAIR?
