Powell and Warsh set to clash

Key Points:

• The upcoming Federal Open Market Committee (FOMC) meeting in mid-June will be historic, marking the first time in nearly 80 years that a sitting and former Fed chair, Jerome Powell and incoming chair Kevin Warsh, conduct business together.
• Despite potential for tension given Warsh's call for "regime change" and President Trump's criticism of Powell, experts expect a collegial atmosphere driven by the Fed's mission rather than personal rivalries.
• Recent economic data showing persistent inflation above target and a strong labor market suggest little support for immediate interest rate cuts, making Warsh's push for easing rates unlikely to gain traction.
• Powell, who will remain as a governor after his chair term ends, has pledged to keep a low profile and not act as a "shadow chair," emphasizing a smooth transition and focus on the Fed's goals amid political pressures.
• Observers, including former Fed Vice Chair Roger Ferguson, express confidence that both Powell and Warsh will maintain the Fed’s independence and prioritize low inflation and full employment over political influence.