Trump and Fed Chair Warsh clash over interest rate policy direction

Kevin Warsh became the new Federal Reserve Chair in May 2025, replacing Jerome Powell after President Trump chose him for the role. Trump has pushed for lower interest rates since returning to office, and he expected Warsh to deliver them. However, Warsh's past record tells a different story. When he served as a Fed governor between 2006 and 2011, he voted against cutting rates even during the financial crisis, when unemployment was rising and inflation was low. He has suggested that artificial intelligence could push prices down, which might justify rate cuts. But inflation has recently increased due to rising energy costs connected to military conflict in Iran. Nine of eighteen Fed members currently expect at least one rate rise before the end of the year.