Kevin Warsh takes his seat at the Federal Reserve at two o'clock this afternoon, and traders expect him to raise interest rates for the first time since July 2023. Trump nominated him in January for the opposite reason. "I'm going to put somebody that wants to cut rates," the president said then. The Senate confirmed Warsh 54–45 in May. Justice Clarence Thomas swore him in at the White House East Room on May 22. Today is his third meeting in the chair, and he has never raised rates in it.
CME FedWatch put the odds of a quarter-point hike at 92 percent this morning, as CNN's live blog reported it. The Fed has held rates at 3.50–3.75 percent at all five meetings this year, the last two of them under Warsh.
Government statisticians beat him to it. The Commerce Department reported at 8:30 that Americans spent 1.2 percent more in August than in July, against forecasts of 0.7 percent, and that gas stations took 3.1 percent more. Consumer prices ran at 3.4 percent in Friday's report, above what economists expected. Brent crude sits at $108.75, its highest since May 19. The Saudi pipeline is shut. A tanker burned in Hormuz. Fuel protests broke out in several countries this week. Trump started a war, and the war put oil into the price of everything a family buys.
What a quarter point does to a mortgage, which of Warsh's colleagues already voted to raise rates in July, and why a hold would hurt him too — below.
