Kevin Warsh, nominee for US Federal Reserve Chair, testifies during a Senate Banking Committee hearing on his nomination on Capitol Hill in Washington, DC, on April 21, 2026.Mandel Ngan | Afp | Getty ImagesIf new Federal Reserve Chair Kevin Warsh is still itching for a “good family fight” over monetary policy, he is likely to get one if he sticks to his guns on interest rate cuts.With inflation spiking and Treasury yields surging, Warsh is likely to confront a Federal Open Market Committee in no mood to ease. In fact, several officials of late have stressed the need for the Fed to keep its options open for rate hikes ahead.If it looked like outgoing Governor Stephen Miran was a lone wolf howling for reductions, seeing a Fed chair trying to defy his fellow policymakers and push for cuts will loom even larger.Those who have watched Warsh over the years, from his prior stint as a Fed governor through his high-profile public disagreements with Fed policy since, expect him to put up strong arguments for cutting. The problem is, he’s likely to lose at least in the short term, a situation that sets up some interesting communication issues for the new central bank leader.”I saw him in action. He does base his decisions on his view of the economy, and even his arguments for why he would favor rate decreases in general were based on his read of what’s happening structurally in the economy,” said former Cleveland Fed President Loretta Mester, who served with the Philadelphia Fed during the prior period when Warsh was on the board. “I just don’t think right now he can make those arguments in a credible way, because we have an inflation problem.”Indeed, surging inflation will be Warsh’s first and primary policy challenge.Officially, Warsh has echoed much of the Trump administration’s position on the current run of price surges — mainly that they are temporary and will fade once the fighting in Iran ceases and various disinflationary forces, such as increased productivity, take over.However, those …
