Overview
- Warsh, a former Fed governor, was formally named Friday to succeed Jerome Powell in May, pending Senate confirmation.
- His crisis-era record shows hawkish warnings on inflation, yet recent comments endorse 2026 rate cuts, leaving investors unsure of his policy path.
- He has long urged a much smaller Fed balance sheet, a shift analysts say could lift long‑term and mortgage rates even if short‑term rates fall.
- Early reactions pointed to a stronger dollar, slumping precious metals, and a steeper yield curve as traders priced in higher long‑run borrowing costs.
- The confirmation faces political crosscurrents, including a DOJ probe into Powell, a threatened Senate hold by Thom Tillis, and questions about the Fed’s autonomy after Trump’s public pressure and weekend joke about “suing” Warsh over rates.