Kevin Warsh is confirmed as Federal Reserve Chair, replacing Jerome Powell. A former Fed critic, he plans to lead a reform-oriented central bank, address rising inflation anxieties, and shrink the Fed's balance sheet after past loose policies.
The Iran war has significantly raised global energy prices, worsening US inflation (3.5% vs. Fed's 2% target) and raising global recession fears. Fed officials are concerned about its impact on living costs and supply chains, creating a dilemma: raise rates to combat inflation or protect jobs.
Treasury Secretary Bessent urges renewed scrutiny of the Federal Reserve's policies and independence amid Trump administration pressure. Fed's role in setting interest rates and its insulation from political influence are questioned.
Trump administration explores firing Fed Chair Powell over renovation costs. Allegations of extravagance & calls for "regimen change" fuel debate on presidential authority and Fed's independence. Cost overruns at the Fed headquarters are questioned.
