💡Jerome Powell Exits, Kevin Warsh Takes Over: What It Means for the Economy🤔

🔷 Key Transition Dates

Friday, 15 May 2026, marks Jerome Powell’s last day in office. Kevin Warsh is set to be officially sworn in as Federal Reserve Chair on Monday, 18 May 2026.

There are reasons to be cautious about how he will perform in the role.

🔷 Buffett’s Silence Speaks Volumes

At the latest Berkshire Hathaway annual meeting, Warren Buffett praised Powell’s tenure, noting his work “helped me sleep better.”

But he made no mention of Warsh, nor offered broader comments on the Fed. This silence has left observers wondering about Buffett’s view of Warsh, especially his independence and readiness for the tough road ahead.

🔷A Tough Economic Hand to Play

The task awaiting Warsh next week is demanding. The latest economic backdrop includes:

1️⃣30-year Treasury yields above 5%

2️⃣Real wages down ~0.2% YoY (3.8% core CPI vs 3.6% nominal wage growth)

3️⃣CPI +3.8% YoY (highest since May 23)

4️⃣PPI index +6% YoY (highest since Dec 22)

5️⃣Core PCE Price Index +2.8% YoY

6️⃣Gas prices +28.5% YoY

7️⃣Brent crude oil prices are up ~ +75% to +80% YoY

8️⃣ Jet fuel: ~$163/bbl → +81% YoY

⚖️ Politics & Policy in Focus

Appointed by President Trump, Warsh faces perceptions of pressure to cut rates. Analysts are watching to see if he leans on quantitative tightening to shrink the Fed’s balance sheet. One of the best way for him to balance inflation control with political expectations.

🔷 Markets Are Watching Next Wednesday

The release of Fed meeting minutes next week will be critical. It will set the tone for the stock markets. Uncertainty remains over Warsh’s stance on interest rates and whether he can steer the economy through these challenges effectively.

What do you think will be Warsh’s biggest test in his first months as Fed Chair? Will there be any interest rates cut in coming FOMC meeting?