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Kevin Warsh was appointed by George W. Bush in 2006 as Fed governor. He was the youngest governor in Fed history at that time at age 35 years. His education is public schooling in California, a degree in public policy at Stanford and a law degree from Harvard. His term at the Fed was 2006 to 2011. During the financial crisis he gained experience, and after term at Fed was lecturer at Stanford Business School, and scholar at the Hoover Institution of Stanford University. Warsh was considered by DJT for the position of Fed chair but was considered to lack enough experience compared to Powell who was made Fed chairman. In 2026 Warsh 56 years old and with more experience was considered by DJT as the top choice when Hassett was retained at the National Economic Council NEC.

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Powell to stay on at the Fed as Governor of the US Federal Reserve.

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The Fed votes 9-3 to cut the benchmark federal funds rate by quarter percentage point to between 3.5 and 3.75% in December 2025. US president DJT is pushing the Fed to cut rates as tariff policies are being implemented to cushion the economy as it adjusts to tariffs.

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Kevin Warsh is a former governor of the Federal Reserve 2006-2011, becoming governor at age 35. He is a partner at the family office of investor Stanley Druckenmiller. Scott Bessent also had connections with the office of Druckenmiller. He is also a lecturer at Stanford Business School and a scholar at the Hoover Institution. He is married to Estee Lauder heiress Jane Lauder, and has spent the years since 2011 at the Stanford School.  Current Fed chairman was appointed by DJT in 2017 and retires in May 2026. If Powell continues as a Fed governor Warsh would take the seat vacated by Stephen Miran when he retires as Fed governor this week. Meantime the Fed under Powell faces an investigation by the Justice Department regarding renovation of its buildings and Senator Thomas Tillis on the Banking Committee says he will not support Warsh until that issue is resolved in favor of Fed retaining its independence. What is unique about Warsh and his selection by DJT? He is a Republican of long standing and his current views are that interest rates can be lower if the Fed reduces its holdings of Treasury securities and mortgage securities it holds. DJT's frustration is that Powell raised interest rates to fight inflation and after DJT became president was slow in cutting rates to boost the economy. DJT's resort to tariffs as a tool in world trade to ensure a level playing field with China when all other tools had failed means more uncertainty in the economy and DJT wanted the Fed to support his policies by lowering rates. ...

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David Reilly says the Fed's response to the large volatility in the stock market after the credit downgrade of the U.S. to AA+ makes sense. The Fed's Open Market Committee voted 7-3 on August 9, 2011, to keep interest rates exceptionally low till mid-2013. With credit markets working and the financial system having sufficient liquidity the Fed did not need to take drastic action. Coming only a short period after the end of QE II, a QE III could be seen as an over-reaction. Another reason for the Fed's action- more pressure was needed for the U.S. government and Congress to shoulder responsibility for the economy. In an earlier statement the Fed had pointed out that the Fed by itself can only do so much and this is consistent with that thinking. There are important headwinds from housing, large consumer debt, deficits, and high unemployment that the Fed alluded to in that statement that will take time to reverse with policy action on several fronts over a longer period. In the speech made on June 6, 2011, U.S. Federal Reserve chairman, Ben Bernanke, said "monetary policy cannot be a panacea."...

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Hilsenrath describes how the Federal Reserve missed the signs of the mortgage financial crisis of 2008, the bubble economy, and how low interest rates and other actions of the Fed to rescue the economy led to a situation which hurt savers. The lack of a serious plan for homeowner rescue as part of the actions by the government further hurt the working and middle class. The rescue also lacked credibility because the banks ended up becoming bigger than they were, and no action was taken in the U.S. which had been pushed by the U.S. in similiar situations overseas- for example on South Korean banks for overborrowing during the 1997 Asian financial crisis.  At the 2014 Boston Fed sponsored conference on Inequality, Fed chairman Janet Yellen described what she called the largest inequality in the U.S. not seen since the 19th century. The average net worth of the lower half of the distribution, said Yellen, of 62 million households, was $11,000, and a quarter of them had zero net worth. These were the shocking statistics that propelled two unlikely outsiders forward- Donald Trump to the Republican nomination for president, and Bernie Sanders who coming close to getting the Democratic nomination settled for a big part of setting the Democratic agenda supported by nominee Clinton in 2016. ...

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The CNBC video of Fed chair Jay Powell at his historic visit to Brookings to explain how he plans to tackle inflation for working families and at the same time feel his way through this so that the Fed does not raise rates more than is essential to tackle inflation, so as to bring back those who have left the labor market. The labor participation rate needs to be pushed back up to where it was before the pandemic, and is important for Powell.

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The Fed's Jerome Powell makes a half percentage point rate cut that takes the federal funds rate to between 4.75% and 5.00%.  11 of 12 Fed governors supported the decision for a half percentage point rate cut.

Powell said:

"We are committed to maintaining our economy’s strength. This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained.”

This is the US central bank's, the Fed's response to high cost of living concerns in the US. It provides relief to households with credit card balances, and business with variable rate debt. Rates for corporate debt and mortgages had started declining in anticipation of rate cuts.

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Miran at CEA is DJT choice to replace Adriana Kugler as Fed governor till Jan 2026.

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Binyamin Applebaum cites different experts on how U.S. Fed policy could play out in 2017-2019. He cites Fed governor Dudley that there is increased uncertainty under the Trump administration, and other economists who say that aging population, lack of innovation, and steady growth under the Obama administration with falling unemployment, make it unlikely that growth will jump well above 2%. The Fed's own forecasts are for for under 2% growth in 2017 and 2018, and Applebaum says this is not expected to change by much. Janet Yellen does not see a huge stimulus as a positive, says Applebaum, because it would increase the deficit at the wrong time. He cites Yellen who prefers to see more fiscal space now that unemployment is down to 4.6%. Steady growth in the view of Fed officials has taken up much of the backlog of people looking for work since the 2008 crisis. Yellen sees some fiscal space as desirable with high debt to GDP ratio at 77 percent, so that the government could respond to some adverse event in the future. A Republican Congress is also averse to sudden increases in the deficit. See the link to views about the uncertainty of how things can play out in a separate article by Neil Irwin of NYT. ...

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Federal Reserve inflation policy changes August 2025 to get a handle on everyday costs people face not the statistics the Fed uses which shows 2%-3% when housing, childcare, groceries, automobiles and repair, heating bills are on the rise. On a rise to the point where average households are barely able to make ends meet and raising a family is so difficult in the US in these conditions.

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Fed Governor Waller, a research director of the St Louis Fed argued that in the post pandemic situation fighting inflation would not increase unemployment. The actual decisions were made by Fed chairman Jerome Powell who also grasped the situation and gave priority to winning the fight against inflation. In his arguments Powell pointed out the disturbing effects of inflation on workers. Powell's determined effort and careful policy management also made it possible to bring inflation down- the manner and way this was achieved and Powell showing a sensitivity to workers and their interests. Powell also communicated this effectively and the Biden administration made this possible through its efforts to rebuild American manufacturing, its investments in infrastructure and getting bipartisan deals through Congress. Without this combined effort by Biden and Powell this may not have worked out the way it did. 

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Inflation psychology and behaviours of Americans is what the US central bank, the Fed, is most afraid of, not a recession. This is the thinking of Fed chairman Jerome Powell. Once an inflationary psychology alters people's behaviours inflation can take root making it more difficult to clear up. This is why the Fed is taking an aggressive approach to interest rate increases.

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The US central bank, the Fed, holds interest rates steady at 5.25% to 5.5%, while holding out the possibility of increasing rates in the future. Overall price increases have declined to 3.4% since September 2023, from 7% earlier, allowing the Fed more room to pause increase in interest rates to fight inflation.

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Fed divided on US rate cuts August 2025.

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Powell needs agreement of others on Fed Board to set US interest rates August 2025. There is now a divergence of opinion with some Fed members looking to lower interest rates in coming months to aid the US economy as it resets the terms of world trade for a level playing field for all, something that had not happened by the ineptitude of previous presidents.

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Strong economic performance means that the US Fed's Powell is "not in a hurry" to raise rates. Powell said "The economy is strong. We see very strong growth." Powell also said about the Fed- "Integrity is everything."

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A grass roots movement that is taking shape in the Social Democrats SPD party since 2018 that is likely to reshape the party around critical issues. A surge in memberships in the party is bringing more young people into the party. Many are joining to bring momentum like that of Jeremy Corbyn into the SPD. Jeremy Corbyn revived Labour by winning 40% of the vote in the 2017 election. He also won the leadership of the Labour party with the help of young people who became Labour party supporters by paying a small fee of $4.15. In 2015 these young activists took part in the leadership contest electing Corbyn. For the SPD the election results under a series of leaders are one long road downhill to support today at about 14%, a shocking figure for the party of Willy Brandt, a figure in the SPD from 1964 to 1987 of the stature of Konrad Adenauer who helped build a new post war Germany. There is no where to go but uphill and little to lose in shifting away from the coalition with the Christian Democrats which has hurt the SPD and the working class. Even a $14 minimum wage was rejected by the CDU in 2019 as the coalition begins to collapse and activists elect a new leader who like Corbyn for Labour in Britain can revive the SPD around critical issues and clear policy for ordinary working class Germans. ...

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The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation. Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.   ...

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The PCE personal consumption expenditures index of the US Commerce Department is likely to come down slower than the CPI index by October 2023. The US Fed prefers to use the PCE index and this could lead to the Fed staying with higher interest rates for longer, says the WSJ. Medical care costs are likely to accelerate by the end of 2023, as housing costs decline. The PCE has a larger weighting for medical care costs than the CPI index. 

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US GDP growth annualized for the 1st quarter is reported to be 1.6% and inflation at about 2.8%. The prospects of continued strong growth and higher inflation suggests the Fed's Powell will not make any interest rate cuts in coming months.