Kevin Warsh Sworn In as Fed Chair as Odds of US Rate Cuts Continue to Fall

Kevin Warsh is set to officially take office as the new chair of the US Federal Reserve on Friday, replacing Jerome Powell at a time when expectations for interest rate cuts are fading. His appointment comes after months of political pressure over monetary policy and growing debate about the future direction of the US economy.

The US Senate confirmed Warsh on Wednesday, mostly along party lines. His arrival has attracted attention because President Donald Trump repeatedly pushed for lower interest rates and openly criticized Powell for keeping borrowing costs high. Trump had previously said he expected Warsh to move more quickly toward rate reductions.

Despite leadership changes at the Federal Reserve, market expectations suggest rate cuts remain unlikely in the near term. Prediction platform Kalshi currently shows only a 38.2% chance that the Fed will lower rates before 2027, down sharply from 96% in February.

Meanwhile, CME FedWatch data points to a 98.8% probability that interest rates will stay between 3.50% and 3.75% through June, with more than a 94% chance of no change in July.

Concerns Over Fed Independence

Warsh’s confirmation has also sparked political debate. Senator Elizabeth Warren raised concerns that the Federal Reserve’s independence could face pressure under new leadership, particularly regarding financial regulation and crypto-related oversight. Warsh also disclosed more than $100 million in personal assets, including investments linked to artificial intelligence and crypto firms.