Will Kevin Warsh Be Confirmed as Fed Chair?

Summary

Julia Coronado discusses Kevin Warsh’s expected confirmation as Fed chair and the challenges he will face forging consensus. She says a Fed pause after three rate cuts is sensible given strong GDP and signs of labor-market stabilization. Coronado also sees inflation risks tilted upward from fiscal expansion and tariff pass-through, implying less monetary easing may be needed.

• Julia Coronado expects Kevin Warsh to face a difficult consensus-building task at the Fed.
• Warsh’s historical balance-sheet hawkishness may make him less interventionist, but his current stance is uncertain.
• Coronado says a pause after three rate cuts is sensible given strong GDP and stabilizing labor data.
• She notes Waller’s comments on a weak 2025 labor market but sees mixed data.
• Inflation risks are tilted upward due to fiscal expansion, tax refunds, and tariff pass-through.
• She believes getting inflation back to 2% will take time and less monetary easing may be needed if fiscal easing continues.
• No specific securities or trades are named in the discussion.