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Former Federal Reserve Chair Jerome Powell has warned against politicizing monetary policy amid President Donald Trump’s sustained attacks on the central bank’s independence. Powell suggested the Fed is undergoing a stress test similar to other institutions under the Trump administration.
The Federal Reserve's preferred inflation gauge rose 3.8% in April, the highest since 2023, driven mainly by a 5.5% surge in gasoline prices amid geopolitical tensions with Iran. Consumer spending increased 0.5%, and the saving rate fell as households tapped savings. Analysts expect the Fed to keep rates elevated until at least 2027.
Kevin Warsh was sworn in Friday as the new Federal Reserve chair, succeeding Jerome Powell after a party-line Senate vote. He takes office amid rising inflation and political pressure from the White House to cut interest rates.
President Donald Trump's Fed nominee faces close congressional scrutiny over central bank independence and interest rate policy. Lawmakers worry about White House pressure to cut rates before the election. Economists warn interference could undermine the Fed's global credibility.
The U.S. Senate has confirmed Kevin Warsh as Federal Reserve Chair, a move that has sparked debate over the central bank's independence. The confirmation, which saw bipartisan support from Senator John Fetterman, comes amid rising inflation and political pressure from the Trump administration.
The U.S. Federal Reserve maintained its benchmark interest rate at 3.5-3.75% during Chair Jerome Powell's final policy meeting, citing inflationary pressures from the Middle East conflict and a sluggish labor market. The decision was widely expected, with 100% of investors forecasting no change.
