Kevin Warsh Takes Helm at US Federal Reserve Amid 4.2% Inflation and Rate‑Hike Pause

Kevin Warsh was appointed to the Federal Reserve Board, entering his first FOMC meeting with backing from President Donald Trump and Senate approval. The United States reported inflation of 4.2%, the highest level in three years and well above the Fed’s 2% target.

Analysts expect the Fed to maintain its current policy stance, with the CME‑FedWatch index indicating a 98.4% probability of another pause in rate hikes. Bond market “vigilantes” continue to sell Treasury securities, keeping two‑year yields near 4.15%. Warsh signaled a cautious “no‑change” approach while monitoring labour market conditions and inflation pressures, underscoring a divergence from the European Central Bank, which recently raised rates.