Jerome Powell has officially stepped down as Chair of the Federal Reserve, with Kevin Warsh set to take the helm. The transition arrives at one of the most uncomfortable macro junctures in years: inflation is re-accelerating, with PPI data spiking sharply and CPI trending back up on a year-over-year basis, leaving the incoming chair with almost no clean path to the rate cuts markets are pricing in.
Warsh holds a single vote on the FOMC — he cannot unilaterally move rates regardless of political pressure. Prediction markets currently assign better than 50% odds to at least one cut within the next 12 months, but with oil prices structurally elevated and producer prices surging, consensus for easing looks difficult to build. The more likely near-term outcome is rates on hold through summer, with a non-trivial risk of hikes re-entering the conversation in 2026-2027.
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