"The central bank voted 10-2 Wednesday to keep rates steady, and outgoing Fed Chair Jerome Powell indicated there was broad support for that stance among voting and non-voting members on the Federal Open Market Committee. So even though Warsh has expressed willingness to lower rates if he replaces Powell, the former Fed governor must still convince his peers to go along. But the economic data may undercut his arguments."
"If that forecast comes true, it would fly in the face of Trump's relentless demands for the Fed to press ahead with aggressive rate cuts and likely put Warsh in the president's crosshairs. At the same time, Warsh's ability to use the chairmanship to command deference on the FOMC can only go so far."
""Past chairs have generally positioned themselves closer to the center of the Committee's views and thus received majority support," JPMorgan said in a note Friday. "Should Warsh find himself in the minority, he would have to decide whether he would tolerate being outvoted.""
Kevin Warsh's nomination to chair the Federal Reserve would place him as one vote on the Federal Open Market Committee, requiring peer support to change rates. The Fed recently voted 10-2 to hold rates, and Powell indicated broad committee alignment. Warsh favors lowering rates, but economic data and analysts' forecasts predict sustained inflation and falling unemployment, reducing the case for cuts. JPMorgan expects no rate changes this year; Warsh could be outvoted and face White House criticism for failing to deliver cuts. Lack of Fed allies and post-meeting briefings raise risks of policy uncertainty and market volatility.
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