Kevin Warsh sworn in as Fed chair; markets expect no 2026 cuts

Kevin Warsh was sworn in Friday as chair of the Federal Reserve at a White House ceremony. He had been confirmed by the Senate earlier and took the oath from Supreme Court Justice Clarence Thomas. President Donald Trump told attendees that Warsh would remain independent from the executive branch on interest-rate policy and praised recent employment readings, saying the administration intends to reduce debt through faster growth and adding, “We want to stop inflation, but we don’t want to stop greatness.”

Traders are pricing essentially no interest-rate cuts for the whole of 2026, according to the CME Group’s FedWatch tool, which derives probabilities from futures prices. The tool shows roughly a 0% probability of easing in 2026 while leaving open the possibility of further tightening at several Federal Open Market Committee meetings. Market-implied odds show about a 3.5% chance of a 25 basis-point rise at the June 17 meeting, roughly a 17% chance of a 25 basis-point increase at the July meeting, and about a two-thirds probability of a hike at the December meeting. The current federal funds target range is 3.50% to 3.75%.

Lower interest rates tend to encourage borrowing and investment; easier credit can also put upward pressure on prices if demand outstrips supply.

Economists and investors will watch incoming economic data and Fed communications for signals about how officials might adjust policy. The Fed’s dual mandate of price stability and maximum employment will frame decisions, and Warsh’s early statements and votes at the FOMC will influence market expectations.