The whole rap on Kevin Warsh was that Trump had finally gotten his guy at the Fed — a loyalist who'd slash rates on demand and juice the economy before the midterms. One FOMC meeting in, Warsh has already made that theory look stupid. He held rates steady, kept the 2% inflation target Trump hates, and essentially told markets: I go where the data goes, not where the president points.
The Setup Everyone Got Wrong
When Warsh's nomination came up for a Senate vote, Democrats lined up to call him a Trump puppet. Sen. Elizabeth Warren led the charge, arguing he'd be a tool of the man who appointed him — cutting rates to goose the economy regardless of what inflation was doing. Nearly every Senate Democrat voted no on those grounds.
As the New York Post points out, that argument has now aged about as well as 'transitory inflation.' Warsh presided over his first Federal Open Market Committee meeting last week, held rates steady against persistent inflationary pressure, and made very clear that data — not politics, not the president, not forward guidance theater — would be running this Fed.
What He Actually Did
Here's what Warsh did in his first FOMC meeting, according to the Post's reporting. He held rates steady. He kept the 2% inflation target in place despite Trump's well-documented preference for lower rates. He ditched the 'dot plot,' the forecasting tool where Fed policymakers signal their future rate expectations, which markets have treated like tea leaves for years. And he kept his post-meeting press conference short — pointedly, deliberately short.
That last part matters more than it sounds. Fed chairs since Greenspan have treated their press conferences like an additional layer of monetary policy, carefully calibrating language to signal, steer, and reassure markets. Warsh apparently thinks that's a lot of self-important noise. He showed up, said what needed saying, and left. The brevity was itself a statement.
He also flagged that the Fed would be rethinking its reliance on the Phillips Curve, the economic model that says growth automatically breeds inflation. Warsh, the Post notes, has long argued that the trade-off the curve assumes is based on bad modeling rather than real-world evidence. Scrapping it as a guiding framework would be a significant shift in how the Fed makes decisions.
The Powell Comparison Is Not Kind to Powell
Jerome Powell has spent the past year getting something close to canonization from the financial press for supposedly standing up to Trump's pressure on interest rates. The narrative was clean: brave independent Fed chair holds the line against political bullying. People loved it.
The Post's Charles Gasparino is less impressed. Powell, he argues, was never that good at his actual job — the inflation part. 'Transitory inflation' was Powell's call during the Biden years, and that turned out to be one of the more expensive analytical mistakes a Fed chair has made in decades. American households spent years watching grocery bills and rent eat their paychecks while the Fed waited too long to act. The fact that Powell picked fights with Trump doesn't retroactively fix that record.
Powell is staying on as a Fed governor, which is his right. Trump noted that Powell doesn't really have much else to do with his time. Petty? Sure. Also not entirely wrong.
What Warsh Might Do Next
One meeting doesn't prove everything, and the Post is careful to say so. But the trajectory is visible. The resolution of the Iran conflict is likely to push energy prices down. AI productivity gains could take another bite out of inflation. If those trends hold, Warsh may well hold rates steady again at the September meeting.
If they don't hold, he has already telegraphed what happens: rates move. The data drives the decision. No political pressure, no soft signaling to make Wall Street comfortable, no dot plots telling speculators what to expect. You get the numbers when he gets the numbers, and then everyone finds out together.
That is, genuinely, a different Fed than the one that spent the last decade giving guided tours of its own thinking. Whether it's better depends on how inflation behaves. But it is different.
The Warren Problem
There is a specific awkwardness here for Senate Democrats who voted against Warsh. The argument was not just that he'd cut rates for Trump — the argument was that an inflation hawk in the Trump era was dangerous, that he'd prioritize price stability over economic growth and working people would pay the price.
But working people have already been paying a steep price. Inflation above 2% is a tax on wages that hits people without assets hardest. An actual inflation hawk running the Fed is not obviously bad for the people Warren says she's protecting. The political framing and the policy reality pointed in different directions, and the political framing won the Senate floor debate.
Warsh, the Post argues, has been consistent about his beliefs for years — long before Trump appointed him. He has been publicly skeptical of the Fed's ballooning balance sheet, skeptical of the Phillips Curve framework, skeptical of forward guidance as a monetary tool. None of this is new. The idea that he would abandon all of it the moment Trump made a phone call required believing that Kevin Warsh is a different person than Kevin Warsh has always been.
The Dingo Take
Look, it is entirely possible that Kevin Warsh will eventually do something that vindicates the Democratic senators who voted against him. One meeting is one meeting. Politicians and central bankers both have long careers, and the pressure from the White House on interest rates is not going away just because Warsh held firm once.
But 'one meeting is one meeting' cuts both ways. The senators who called him a Trump tool before he had presided over a single FOMC meeting were making a political argument dressed as an economic one. They didn't like who appointed him, so they decided in advance what he would do. That is exactly the kind of reasoning they accused Trump of using when he attacked Fed independence. It turns out everyone in this story loves Fed independence when it produces the outcomes they want.
What actually happened here is that a genuine monetary hawk got the job he has been preparing for his entire career and immediately started doing the job. He held rates, killed the dot plot, kept the inflation target, and walked out of a short press conference. If that pattern holds, the biggest losers are both Trump, who wanted cheap money, and the Democrats who told everyone he'd get it. Sometimes the boring answer is that the person is just going to do what they said they'd do.
