Market AnalysisJun 19, 20262 Min

Kevin Warsh’s first Fed rate decision today: What should markets expect?

In Kevin Warsh’s first policy meeting as in charge of the US Federal Reserve, the focus would not just be on interest rates, but also on Warsh himself and his outlook on monetary policy.

Warsh has presided over the two-day meeting of the Fed’s open market committee (FOMC) this week, with a decision to be announced at 1800 GMT on Wednesday.

Economists are broadly expecting the Federal Reserve to leave its benchmark interest rates unchanged. Notably, the central bank has kept its interest rates steady throughout 2026, with its last cut occurring in December 2025.

Investors will be paying close attention to Warsh’s comments about inflation and the path of monetary policy, especially given President Donald Trump’s criticism of former Fed chairman Jerome Powell for moving too slowly to cut interest rates.

Warsh had last month succeeded Powell at a time when inflation was at its highest level in more than three years. Interestingly, Warsh had argued last year for interest-rate cuts and his appointment was seen as a shift to ease the monetary policy. But the need to curtail the current high inflation by raising borrowing costs have shifted the discussion toward raising rates and not cutting them.

Markets will closely watch whether Mr. Warsh is asked to explain how calls for lower interest rates fit with the latest inflation and employment trends, Jerry Tempelman, former senior analyst at the New York Federal Reserve Bank, told CBS News.

Warsh’s new approach towards policy

The Fed meeting is also expected to be a test of Warsh’s new communications strategy.

Warsh had previously shown objection to the ‘dot plot’, a larger set of data that also contains the Summary of Economic Projections (SEP) that includes the outlook for unemployment, inflation and gross domestic product. Markets view the dot plot as an indicator on where individual officials expect interest rates to head in the coming year.

Warsh disapproved of such forward guidance as he believed that it limited the Fed’s decision-making capabilities.

“The Fed tells the whole world what their dots are going to be, what their forecasts are going to be,” he had said earlier. “Well, the Fed’s human. Then they hold onto those forecasts longer than they should. I think if the Fed were to wait until it gets into a meeting before making a decision, that incremental deliberation can keep the central bank from compounding its errors. I think these are big changes that are needed.”

Now, analysts fear Warsh would not participate in the ‘dot plot’ this time, either because he feels he’s not ready after having only been in office since May 22, or simply because he doesn’t like its implications for ‘forward guidance’.