Kevin Warsh Shifts Federal Reserve Focus to Price Stability

Kevin Warsh has become head of the Federal Reserve, signalling a shift in the central bank’s policy framework. He has abandoned forward guidance and emphasised a return to the core mandate of price stability, moving away from the market‑stability focus that developed during years of quantitative easing.

Warsh argues that the “Fed Put” – the belief that the Fed would intervene to protect asset prices – has inflated equities and contributed to wealth inequality. He warns that lower real rates will likely end, with higher long‑term interest rates, a steeper yield curve and greater risk premia for investors.