Fed Chief Warsh signals rate cuts delayed to December, defying Trump's pick expectations
New Fed Chair Kevin Warsh said the new task forces he has created give the Federal Open Market Committee room to put off changing rates until December, an approach that defies President Trump's call for faster cuts. Treasury yields rose, the dollar strengthened and US equities slipped across sectors as investors recalibrated.
New Federal Reserve Chair Kevin Warsh used his first week in office to set up four task forces inside the Federal Open Market Committee. The groups will cover balance-sheet normalisation, financial stability, the communications framework and longer-run inflation targeting. Per MarketWatch, the agenda effectively gives the FOMC room to push any rate-change decision to its December meeting.
Trump nominated Warsh on the assumption he would deliver fast rate cuts. The new chair's tone in his first press conference was cautious instead: he said he wanted full clarity on energy prices and the Iran framework before moving. The White House has not yet issued a formal response.
The market reaction was immediate. The 10-year Treasury yield climbed eight basis points to 4.32%, while the dollar index gained 0.4%. The S&P 500 ended the day 0.6% lower, with rate-sensitive consumer and real-estate names hit hardest. Investors are now watching the 22 July FOMC minutes and Warsh's 25 July Jackson Hole address for further direction.
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