Trump’s trust gives Fed Chair Kevin Warsh more room to act

Kevin Warsh, the new chair of the Federal Reserve, is preparing for his first news conference this week with unusual support from President Donald Trump, according to people familiar with the relationship. That trust could give Warsh more space to pursue changes inside the central bank beyond interestrate policy. Warsh is expected to keep rates steady for now, even as Trump has pushed for cuts. The article says Warsh may use the president’s backing to build support for a broader agenda that could include reducing the Fed’s balance sheet, revisiting how it approaches inflation, and shifting the central bank’s communication style. The broader backdrop is a U.S. economy that remains resilient, though inflation pressure has stayed elevated and energy prices have risen because of the Iran conflict. Markets have also adjusted expectations, moving from rate cuts earlier in the year to the possibility of at least one increase later in 2026. Warsh will still need support from other members of the Federal Open Market Committee as he tries to shape policy and the Fed’s internal decisionmaking.