Kevin Warsh’s First Big Test

The Fed’s policy outlook has become more divided. The Federal Open Market Committee (FOMC), which sets U.S. monetary policy, meets eight times a year to determine the federal funds rate.  In May of this year, Kevin Warsh assumed the role of Federal Reserve Chair, but in the two most recent interest-rate votes, three FOMC members voted in favor of raising rates. While Chair Warsh has significant influence over the discussion and direction of policy, changes to interest rates ultimately depend on a vote by the 12-member committee. Three votes remain a minority, but if inflation remains elevated while unemployment stays low, pressure could build within the FOMC to raise rates to bring inflation back toward the Fed’s 2% target.

Source: FOMC Minutes

This graph was produced by Lucas Juery, CFA, CFPⓇ and is not intended to provide financial advice.