One of the biggest questions hanging over Kevin Warshâs first Federal Reserve meeting as chair on Tuesday: Will he try to strong-arm his colleagues or work to earn their trust?
President Donald Trumpâs pick spent much of his confirmation process touting dramatic changes to how the Fed broadcasts its thinking; manages its balance sheet; adjusts interest rates for AI; and more.
The next two days will offer an indication of âwhether Warsh continues in the mode of âbreaking heads,â or is determined to bring about change through the channel of persuasion and discussion and dialogue,â said David Wilcox, a former Fed economist now with Bloomberg Economics and the Peterson Institute for International Economics.
âI canât remember a turnover, a change in the chairmanship, that involved as much uncertainty about what the basic approach will be going forward,â Wilcox continued. âI think much of it hinges on the question of whether Warsh chooses to maintain greater continuity with the basic themes of his campaign to win the nomination, or whether he decides that heâs going to focus more on playing an inside game and winning over his colleagues by the traditional means.â
The Fed is expected to leave rates untouched this week while signaling a more hawkish lean. As Warsh fields questions Wednesday about the path forward, any sign he could support a hike will open him up to criticism from Trump.