Senate Confirms Kevin Warsh as Fed Chief: Markets Brace for Policy Shifts and End of Rate Cuts

Fifteen years after leaving the Federal Reserve in opposition to an expansive bond-buying program that has since saddled it with a $6.7 trillion portfolio, Kevin Warsh is returning to the U.S. central bank as its leader with an extensive reform agenda that may be tough to translate into quick changes. The U.S. Senate on Wednesday confirmed Warsh to a four-year term as Fed Chair in a largely party-line vote, with a swearing in to follow in the days ahead.

His criticism of the central bank has spanned everything from how the Fed monitors inflation to its willingness to bail out markets to its communications strategy, and the possible changes could involve not just technical reform to the central bank's economic analyses, but sensitive shifts in how the Fed speaks to financial markets and the public more broadly - issues previously hashed over and considered hard to meddle with quickly. President Donald Trump clashed repeatedly with Fed Chair Jerome Powell, initially demanding interest rate cuts but expanding his pressure through an effort to fire Fed Governor Lisa Cook and a Justice Department criminal probe of Powell that many consider a broader assault on the central bank's independence. The Cook case is pending before the U.S. Supreme Court and the Justice Department has closed its Powell investigation.

Powell's eight-year tenure as Fed chief ends on Friday, but he has decided to keep his seat on the central bank's Board of Governors while that investigation fully winds down, in part to buffer the Fed against further legal attacks by the administration.

His criticism of the central bank has spanned everything from how the Fed monitors inflation to its willingness to bail out markets to its communications strategy, and the possible changes could involve not just technical reform to the central bank's economic analyses, but sensitive shifts in how the Fed speaks to financial markets and the public more broadly - issues previously hashed over and considered hard to meddle with quickly. President Donald Trump clashed repeatedly with Fed Chair Jerome Powell, initially demanding interest rate cuts but expanding his pressure through an effort to fire Fed Governor Lisa Cook and a Justice Department criminal probe of Powell that many consider a broader assault on the central bank's independence. The Cook case is pending before the U.S. Supreme Court and the Justice Department has closed its Powell investigation.

His criticism of the central bank has spanned everything from how the Fed monitors inflation to its willingness to bail out markets to its communications strategy, and the possible changes could involve not just technical reform to the central bank's economic analyses, but sensitive shifts in how the Fed speaks to financial markets and the public more broadly - issues previously hashed over and considered hard to meddle with quickly. President Donald Trump clashed repeatedly with Fed Chair Jerome Powell, initially demanding interest rate cuts but expanding his pressure through an effort to fire Fed Governor Lisa Cook and a Justice Department criminal probe of Powell that many consider a broader assault on the central bank's independence. The Cook case is pending before the U.S. Supreme Court and the Justice Department has closed its Powell investigation.

His criticism of the central bank has spanned everything from how the Fed monitors inflation to its willingness to bail out markets to its communications strategy, and the possible changes could involve not just technical reform to the central bank's economic analyses, but sensitive shifts in how the Fed speaks to financial markets and the public more broadly - issues previously hashed over and considered hard to meddle with quickly. President Donald Trump clashed repeatedly with Fed Chair Jerome Powell, initially demanding interest rate cuts but expanding his pressure through an effort to fire Fed Governor Lisa Cook and a Justice Department criminal probe of Powell that many consider a broader assault on the central bank's independence. The Cook case is pending before the U.S. Supreme Court and the Justice Department has closed its Powell investigation.