The Federal Reserve is widely expected to hold interest rates steady at 3.5% to 3.75% when Kevin Warsh presides over his first FOMC meeting today, with the decision due at 2 p.m. ET. Warsh was sworn in as the 17th chair of the Federal Reserve on May 22, 2026, and this inaugural meeting marks the first test of his leadership amid elevated inflation and competing pressures from hawks and doves within the committee.
The decision itself is a straightforward hold—markets assign roughly a 97% probability to unchanged rates, according to CME FedWatch data. But Warsh’s real debut comes in how he communicates the decision and signals the Fed’s future direction. The new chair has pledged what he calls a “regime change” in Fed policy, centered on less frequent communications and reduced forward guidance to markets about the central bank’s next moves.
Warsh has long criticized the Fed’s tendency to telegraph its intentions, arguing it constrains future policy flexibility. In his April Senate confirmation testimony, he said, “I think truth-seeking is more important than repetition. If one has a press conference, one wants to deliver some important news.” He has not committed to holding press conferences after every meeting, as his predecessor Jerome Powell did, suggesting he may return to quarterly briefings.
The inflation backdrop complicates Warsh’s debut. Consumer prices climbed 4.2% in May, the highest level in three years, driven largely by higher energy costs from the U.S. and Israel’s ongoing war with Iran. Core inflation, which excludes volatile food and energy components, rose to 2.9% in May, above the Fed’s 2% target. However, a fragile peace agreement between the U.S. and Iran announced over the weekend has helped push down oil and natural gas prices, potentially easing near-term inflation pressure.
The FOMC is also expected to release an updated Summary of Economic Projections today, including the dot plot that shows officials’ forecasts for future rate moves. Warsh has expressed skepticism about the dot plot, saying it can bind the Fed to outdated forecasts and prevent quick policy adjustments. Some analysts speculate he may seek to reform or remove the chart, though any such change would require consensus from the full committee.
Warsh faces a divided committee. Three FOMC members dissented at the last meeting in May, signaling they wanted the Fed to stop leaning toward future rate cuts. Meanwhile, his predecessor Jerome Powell remains on the board as a governor, a rare circumstance that creates additional complexity as Warsh builds consensus for his communication reforms. “The main risk to watch is a possible disconnect between a committee leaning toward a more restrictive stance and a chair whose own views on inflation appear more constructive,” according to Tiffany Wilding, an economist at PIMCO.
The new chair has also signaled openness to a smaller Fed balance sheet and a shift away from what he views as excessive market guidance. In a 2014 review of the Bank of England’s communications strategy, Warsh argued that central banks do not need monthly meetings, writing that “outside of crisis periods, the economic landscape tends to change rather slowly.” He echoed those themes in a 2025 speech, criticizing what he called the “swivel chair problem” of Fed officials constantly reacting to the latest data releases.
Sources
- Kiplinger — FOMC rate decision and hold at 3.5%-3.75%
- Yahoo Finance — Fed widely expected to hold rates, decision at 2 p.m. ET
- Chase Bank — Warsh sworn in May 22, 2026, as 17th Fed chair
- EL PAÍS English — Inflation at 4.2% in May (three-year high), core inflation 2.9%, Warsh’s regime change agenda, dot plot and Summary of Economic Projections, FOMC dissents
- CNBC — Warsh’s criticism of Fed communications, “truth-seeking” quote from confirmation hearing, forward guidance and dot plot concerns, press conference frequency plans
- Investopedia — Federal funds rate held at 3.5%-3.75%, Warsh’s first meeting as chair
- CME Group FedWatch — 97% probability of unchanged rates
- PIMCO — Tiffany Wilding quote on committee-chair disconnect risk
