Will Kevin Warsh’s first meeting in charge of the Federal Open Market Committee be the first since June 2025 without a dissenting vote being cast? Economists think so.
The final meeting of Jay Powell’s tenure as chair saw four votes against the majority decision to hold interest rates for now with a preference to ease borrowing costs later on. One was in favour of a rate cut and three favoured removing the easing bias from the post-meeting policy statement.
The four dissents marked the most fractious meeting since the 1990s. Six weeks on, Warsh has replaced Stephen Miran, who had backed a cut, on the board. And the surge in inflation has likely sounded the knell for the easing bias.
Diane Swonk, chief economist at KPMG US, said she did not think there would be dissents not only because of the surge in price pressures. “I think they are going to want to shore up Kevin,” she said.
Swonk and Citi chief economist Nathan Sheets think the statement will be shorter, with any guidance on the next move for US borrowing costs removed.
“Warsh has made clear that he’s not a big fan of forward guidance. And not having it in there also addresses the concerns of those members that wanted [the statement] to be more neutral,” Sheets said.
