BlockBeats report: On May 25, Kevin Warsh, personally appointed by U.S. President Trump, was officially sworn in as Chair of the Federal Reserve. Many believe Trump will now bear full political responsibility for the performance of the U.S. economy and inflation.
The report states that Trump had long blamed former Chair Powell for high interest rates, a sluggish housing market, and economic slowdown, but with Waugh’s appointment, Fed policy is now seen as a direct extension of "Trump economics."
The U.S. economy is currently facing multiple pressures, including the 30-year mortgage rate rising above 6.5%, PCE inflation increasing to 3.5%, and the national average gasoline price surpassing $4.55 per gallon. Markets are concerned that, amid high inflation, the Federal Reserve may be forced to continue raising interest rates, which could further negatively impact the Republican Party’s prospects in the midterm elections.
In addition, Walsh advocated for weakening forward guidance and increasing policy uncertainty, and the number of dissenting votes at the Fed’s April meeting reached its highest level in nearly 30 years, indicating a clear split within the institution.