Kevin Warsh, the 17th Federal Reserve chair, was sworn in on May 22, 2026, and is already navigating one of the more uncomfortable early tenures in recent memory.
The May CPI climbed 4.2% year-over-year, the hottest reading since April 2023. The monthly increase came in at 0.5%. Core CPI, which strips out food and energy, rose 2.9% year-over-year.
President Trump, who nominated Warsh on March 4, 2026, has made it abundantly clear he wants rates going in the other direction. Trump characterized the May inflation figures as “great,” attributing the uptick to external factors like geopolitical conflicts rather than anything requiring a monetary policy response.
The rate hike calculus
Futures pricing indicates a 63% probability of a 25 basis point rate hike by October 2026, a dramatic reversal from earlier expectations of cuts that had aligned more closely with Trump’s publicly stated preferences.
