Kevin Warsh Officially Assumes Federal Reserve Chair (May 15); Powell Era Ends After 8 Years; First FOMC Meeting June 16–17

Kevin Warsh became the 17th Chairman of the Federal Reserve on May 15, 2026, as Jerome Powell's term as Chair officially expired. Warsh was confirmed by the Senate on May 13 in a 54-45 vote — the closest Fed Chair confirmation in modern history, almost entirely along party lines, with only Senator John Fetterman (D-PA) crossing the aisle. **Powell's Legacy at Handoff:** Jerome Powell served as Fed Chair from February 2018 through May 15, 2026 — an 8-year tenure spanning the COVID-19 pandemic, 40-year high inflation (9.1% CPI peak), the fastest rate hike cycle in four decades (0–5.50%), and a partial easing cycle to 3.50–3.75%. His greatest achievement: avoiding an NBER-declared recession through sustained tightening. His inheritance to Warsh: inflation unsolved — with CPI at 3.8% and PPI at 6.0% announced in the final 48 hours of his term. **The Stagflation Inheritance Warsh Faces:** 1. April CPI: 3.8% YoY (May 12) — highest since May 2023 2. April PPI: +6.0% YoY (May 13) — hottest since December 2022 3. Core PCE: 3.2% (March, released April 30) 4. Fed Funds Rate: 3.50–3.75% (held unanimously since December 2025) 5. CME FedWatch: ~30% probability of at least one rate hike by year-end 6. Brent crude: ~$105-110/bbl (Iran war energy shock; no Hormuz breakthrough at Trump-Xi summit) 7. Section 122 tariff cliff: July 23, 2026 (68 days away) **Warsh's First FOMC: June 16–17, 2026:** Markets price ~97% probability of no rate change at the June meeting. JP Morgan's base case: hold through end-2026 with possible hike Q3 2027. The June meeting will be Warsh's first opportunity to signal his policy framework — hold, hold-for-longer, or a first hint of hiking. **Rate Cut Expectations — Irony Alert:** Trump nominated Warsh specifically with the expectation of lower rates. However, the combination of hot CPI (3.8%), hot PPI (6.0%), and still-elevated oil prices means Warsh may find the Fed has 'other ideas' — raising the unprecedented political tension of a rate-hold (or potential hike) under a Fed Chair nominated precisely to lower rates.