The Federal Reserve Enters Its Kevin Warsh Era

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Kevin Warsh** (0:08)
It's an honor, a true honor, to be back at the Federal Reserve.

**David Gura** (0:12)
Kevin Warsh just made his public debut as chair of the Federal Reserve.

**Kevin Warsh** (0:17)
We're going to listen hard to what the experts say and make our own decision, but I can't give any forward guidance about what we're going to do next.

**David Gura** (0:24)
Less than a month into the job, Warsh just oversaw his first Fed policy meeting. And in his first news conference today, Warsh announced he and his fellow policy makers unanimously agreed to hold rates steady.

**Kevin Warsh** (0:36)
The committee decided to maintain the target range for the Fed funds rate at three and a half to three and three quarters percent in support of the Fed's dual mandate.

**David Gura** (0:47)
A mandate to achieve maximum employment and stable prices.
The Federal Open Market Committee's post-meeting statement was shorter, a bit simpler, the Fed chair said, than we've seen in recent years. And it was hawkish in tone, reflecting the Fed's concern with inflation.

**Kevin Warsh** (1:02)
I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.

**David Gura** (1:13)
The Fed chief's words are always scrutinized, and all the more so with Warsh's comments today. He was President Trump's pick, and the president has been very clear about his preference for rate cuts. But markets are looking for a rate hike, and investors are watching the chairman of the world's most powerful central bank to see how independent he is. What we heard from Warsh today is his eagerness to reform the central bank on a variety of fronts with the goal of having a federal reserve that is clear-eyed about its mission, fit for purpose, and focused on the future. I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, I sit down with Bloomberg's Enda Curran, who was in the room for FedChair Kevin Warsh's first news conference, for a conversation about what we learned about the new FedChair's approach to one of the most powerful jobs in the world.
And in broad strokes, how did Kevin Warsh do in his debut as Fed Chair? What was the vibe in the room where he held this press conference?

**Enda Curran** (2:19)
I think it was the old hawkish Kevin Warsh who turned up. You know, remember David going into this meeting, there was a lot of discussion around credibility. What message would the new Fed Chairman send on inflation, given the whole political backdrop and the pressure on the Fed to bring down interest rates? Well, he seemed to send a pretty clear message that right now inflation is elevated. It's above where the central bank wants it to be.
And he made it clear that price stability is going to be a focus for the Fed under his chairmanship. Now, that's the kind of generous take, so to speak. He certainly, what he did not do was he did not signal that they would have to raise interest rates anytime soon.
He stopped well short of that because obviously that's where he get into political dynamite territory. But, you know, relative to what we expected, it was Kevin Warsh, the old hawk on show today.

**David Gura** (3:05)
We saw the statement heard from the Fed chair, one line delivered emphatically by Kevin Warsh, the committee will deliver price stability. Effectively, inflation is the chief concern here for policy makers.

**Enda Curran** (3:16)
So two things on that. Number one, it sends a signal that the Fed is serious about the inflation story right now. We know that inflation hit a three-year high last month. We know a lot of that is due to the Iran energy story, but not just Iran and energy, it's the AI spillover and it's other components in the economy too. So he's sending a signal that he is cognizant of it. But where he stopped short, David was sending a signal about what they would do to get inflation back down. That's the gap left in the proceedings from today. He's saying, I don't want to give forward guidance, I don't want to tell you what we may or may not do, only to have to reverse course maybe or change plans later on.
But plenty of people watching this today were making the point, you're making the point that you're worried about inflation, but you're not saying what you're going to do about it. So there's a feeling there's a little bit of a missing part of the jigsaw there.

**David Gura** (4:03)
So we got the hawkish Kevin Warsh, and we got Kevin Warsh, the reformer as well. There's a lot of talk in the run up to this meeting, Enda, about whether Kevin Warsh plans to change the way that the Fed communicates, if he would make changes to a Fed standby. That's the dot plot, part of the summary of economic projections. And before I ask you about that, just remind us what that is exactly.