Federal Reserve Chair Warsh is heading into his first major policy test, according to Nick Timiraos. Timiraos wrote that Warsh chaired his first meeting as Fed chief last month, when officials unanimously agreed to leave rates unchanged. That consensus was relatively easy to reach because there was little appetite within the committee to act at the time.
The picture may get harder to manage in the coming weeks. Timiraos said some of Warsh’s colleagues have grown more concerned about inflation and could push to open a discussion on rate hikes at the Federal Reserve’s July 28-29 meeting. Warsh is also set to testify before Congress this week, giving him a chance to help shape the committee’s emerging consensus. By then, he will have the latest June inflation report in hand, which Timiraos described as the last major batch of data due before the meeting.
Federal Reserve Chair Warsh is approaching his first major policy decision: whether to reverse the Fed’s rate cuts from last year, according to Nick Timiraos.
Timiraos wrote that Warsh chaired his first meeting as Fed chair last month, where policymakers unanimously agreed to keep interest rates unchanged. At that point, reaching consensus was relatively easy because there was little willingness inside the committee to take action.
July meeting could test that unity
That may not last. Timiraos said keeping the committee aligned will become harder in the weeks ahead as some of Warsh’s colleagues grow more worried about inflation. Those officials could push to discuss rate hikes at the Fed’s July 28-29 meeting.
Warsh is also due to testify before Congress this week. Timiraos said the appearance will give him a chance to shape the committee’s consensus. He will also have the latest June inflation data by then, the last major batch of data scheduled before the meeting.
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