Kevin Warsh took the oath as Federal Reserve Chair on May 22, 2026, and inherited what might be the least enviable job in Washington. Inflation is running hot, bond markets are jittery, and the political class wants cheaper money.
The Consumer Price Index recently clocked in at 3.3%, well above the Fed’s longstanding 2% target.
A hawk walks into a dovish trap
Warsh, who previously served as a Fed governor from 2006 to 2011, has been vocal about his preference for strict adherence to the 2% inflation target. He’s publicly criticized the flexible average inflation targeting framework that his predecessor Jerome Powell adopted, a strategy that essentially gave the Fed permission to let inflation run above target for a while to make up for periods when it ran below.
Several Fed officials have warned that if inflation and inflation expectations continue climbing, rate hikes could be on the table. This is a dramatic reversal from where markets stood earlier, when traders were pricing in rate cuts for 2026.
