Despite economic data sliding in favor of Fed nominee Kevin Warsh, the dovish would-be chair is likely to return to the central bank with something of a battle on his hands.
Warsh, who formerly served as a governor under Chair Ben Bernanke, landed Trump’s nomination to take over from Jerome Powell this spring—and with it came the implicit signal that the base rate would be moving lower. After all, President Trump made it clear he would be replacing Powell only with someone more open to the rate cuts the Oval Office has been requesting for the past year.
Recent data is supplying the evidence needed to land the argument. At present, inflation expectations are coming in above the target of 2%, but not as hot as economists feared. The Bureau of Labor Statistics (BLS) reported Friday that the consumer price index increased 0.2% in January on a seasonally adjusted basis, bringing the year-over-year increase to 2.4%. That annual rate is the lowest it’s been since June 2025, suggesting Trump’s tariffs haven’t provided the one-off spike in prices that many consumers feared.
