Warsh’s long focus on inflation could collide with Trump’s demands for cheaper money
Kevin Warsh is nominated as the next Federal Reserve chair as the candidate who could finally deliver the rate cuts president Donald Trump has long demanded. However, the economic backdrop he faces suggests that cheaper money might have been easier said than done.
Warsh has built his reputation as an inflation hawk, frequently critical of both the Fed’s past stance and even the quality of the data it relies on. That record is one reason many market participants were surprised Trump tapped him in the first place. For mortgage professionals hoping for a swift pivot to lower borrowing costs, those contradictions matter.
In the latest CNBC Fed Survey, market economists warned that high oil prices and resurgent inflation would likely block Warsh from delivering meaningful cuts.
Respondents said high crude prices are expected to push headline inflation up by 0.6 percentage point this year while shaving roughly half a point from growth.
They also judged, by an 81% majority, that oil is likely to boost core inflation as well, complicating any attempt to ease policy despite slower output.
“Fed Chair Nominee Warsh will probably be hamstrung delivering Trump the rate cuts the president wants because oil prices and inflation will remain higher than hoped for a long time,” Rob Morgan, senior vice president and market strategist at Mosaic, said.
Jeanine Pirro of the US Department of Justice shifts scrutiny to the Federal Reserve watchdog, while the move clears a path for leadership changes and refocuses attention on rate policy risks.https://t.co/RW8LuiiPYB
— Mortgage Professional America Magazine (@MPAMagazineUS) April 24, 2026
Survey participants, on average, are not fully pricing even a single cut this year. Only 58% expect any reduction at all, and the federal funds rate was forecast to edge down to about 3.5% – a modest 0.14 percentage point below its current setting.
The probability of recession stands at roughly one in three, according to the same poll, a subjective estimate rather than an official forecast that could prove too high or too low depending on incoming data.
“The Fed needs to signal optionality on its next move in rates – it could be up instead of down,” Diane Swonk, chief economist at KPMG, said.
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