By Hilarey Gould

Kevin Warsh was sworn in as the 17th chair of the Federal Reserve on May 22, 2026. The job he stepped into has some challenges at present, particularly in building committee consensus while balancing the Fed’s dual mandate. To support continuity during the transition, former Fed Chair Jerome Powell has agreed to remain on the board.

For investors, the natural question may be what is likely to change, and the answer may be less than expected – at least in the short run. U.S. monetary policy is set by the Federal Open Market Committee (FOMC), a 12-member body that votes on every decision regarding the federal funds rate.¹ The chair shapes the meeting agenda, steers the discussion and speaks for the group, but ultimately holds only one vote – just like all committee members. A new face at the head of the table doesn’t rewrite the data or override committee consensus.

What a new chair may be able to shift, though, is tone, communication and emphasis. With the next FOMC meeting scheduled for June 16-17, investors may be watching Warsh closely for early reads on how he plans to run the central bank.

“The Kevin Warsh era has begun,” J.P. Morgan Wealth Management Chief Investment Strategist Phil Camporeale said. “The Federal Reserve is not expected to move rates in the June meeting, and we believe they will be on hold for the rest of 2026. There will, however, likely be an explicit move away from a bias toward easing to a neutral stance on rates. Additionally, there will be plenty of discussion around the future direction of policy in Chair Warsh’s first press conference, including the ‘dot plot’ and summary of economic projections. Diversification has been the best antidote to volatility so far in 2026, and we believe that will continue as investors position themselves for uncertainty for the path of rates moving forward.”

What to expect at Warsh’s first Fed meeting

The economic picture Warsh inherited is complicated. The Personal Consumption Expenditures (PCE) Price Index, historically the Fed’s preferred inflation gauge, rose 0.4% in April – up 3.8% from a year earlier – driven by rising oil prices. Core PCE, which strips out more volatile food and energy prices to capture the underlying trend, came in at a more manageable 3.3% year over year.²

Employers added 172,000 jobs in May, coming in above expectations, and unemployment held at 4.3%.³ While the job market appears on solid footing, prices remain a watch item, making a June rate cut highly unlikely. The federal funds rate – the short-term rate that influences borrowing costs across mortgages, credit cards and business loans – has been sitting at 3.50% to 3.75% through several consecutive FOMC meetings since December 2025. Our strategists’ base case is for it to stay there through year-end.

After all, cutting rates when inflation is running nearly 2 percentage points above the 2% target may be hard to justify. And if the conflict in Iran keeps energy costs elevated, that makes the case for lower rates even harder.

Some Fed governors, such as Christopher Waller, have made clear that the committee should remove any bias toward easing and instead move policy toward a more neutral stance. That’s why – while it isn’t our base case – we don’t think a move in either direction is completely off the table.⁴ In fact, at the April meeting, three FOMC members dissented not because they disagreed with holding rates steady, but because they objected to including an easing bias in the committee’s policy statement.⁵

Three things worth watching at the June Fed meeting

The dot plot

Four times a year, the Fed releases a chart after the FOMC meeting – known as the dot plot – that shows where each FOMC member expects interest rates to go over the next several years.

June is one of those meetings.

Warsh has been openly skeptical of the practice, arguing that publishing forward projections locks policymakers into positions too early and can compound mistakes when the economy shifts.⁶ He likely won’t be able to eliminate the dot plot at his first meeting, but any change in how the committee’s projections are framed or discussed could be a meaningful early signal of Warsh’s intentions.

Whether there’s a press conference

Former Chair Jerome Powell held a press conference after every FOMC meeting. At his confirmation hearing, Warsh did not commit to continuing the practice, hinting instead that he’d like fewer post-meeting press conferences.⁷

The language in the policy statement

Even without a rate move, wording matters. Any shift in how the committee describes the inflation outlook, the labor market or the path ahead could affect bond prices and investor expectations.

What the Federal Reserve chair does (and doesn’t do)

The Fed chair frames the debate and communicates the outcome of the FOMC meetings, but all rate decisions go to a committee vote. The FOMC’s 12 voting members include the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York and four rotating regional bank presidents.⁸

That matters because the committee Warsh inherited has been leaning away from rate cuts. Recent FOMC minutes reflected a majority view that “some policy firming” (Fed language for rate hikes) would likely become appropriate if inflation keeps running above target.⁹ Warsh can’t override that consensus; rather, he can work within it or perhaps, over time, build toward a shift.

Warsh may also have to navigate perceptions of Fed independence. He was direct at his April 21 Senate confirmation hearing, stating: “Inflation is a choice, and the Fed must take responsibility for it.”¹⁰ He also testified that the central bank must “stay in its lane” and that independence is “largely up to the Fed” to earn and protect.¹¹

Continuity vs. change: Where new leadership can matter

Communication is where Warsh may be able to move fastest. He’s expressed interest in scaling back “forward guidance,” the Fed’s practice of telegraphing where rates are likely headed in the future. Warsh has pointed to former Chair Alan Greenspan’s approach as a model – that is, letting data drive decisions meeting by meeting rather than broadcasting intentions well in advance.¹² Less forward guidance may mean investors would need to watch incoming data more closely, rather than relying on the Fed to map out the path.

Warsh has also questioned whether the headline PCE figure tells the full story on prices.¹³ He’s shown interest in trimmed-mean approaches, which remove the most extreme price changes from the calculation to isolate the underlying trend. Any change in the metrics the Fed emphasizes publicly could shift how markets interpret whether policy is tight enough or not.

Tone shifts don’t automatically change rates. FOMC decisions are still made up of 12 votes, and several members remain focused primarily on getting inflation back to the 2% target. How quickly Warsh builds consensus within the committee will matter as much as the priorities he brings to the table.

What investors can do now

A change at the Fed doesn’t mean it’s time to overhaul your portfolio, but when both stocks and bonds face pressure from persistent inflation and rising yields for a short period of time, there a few things you might want to consider:

• Diversification: See if your holdings are spread across asset classes and geographies. Concentration in any single area can add risk when the rate outlook is uncertain.
• Real assets: Commodities, infrastructure and global real estate have historically carried a positive relationship to inflation while offering lower volatility than broad equities.
• Gold: The metal can still act as a hedge against inflation and currency volatility.

The trade-offs between income, protection and long-term growth depend on your specific timeline, liquidity needs and risk tolerance. The key is not reacting to a single event or headline.

The bottom line

The June 16-17 FOMC meeting is Kevin Warsh’s first as our new Fed chair, and it may tell investors more about how he plans to lead the Federal Reserve than where rates might go this year. His priorities represent a genuine shift in emphasis, even if every rate move still requires a committee majority.

While a change in Fed leadership could come with changes to Fed communications, investors shouldn’t feel the need to change their strategy. Consider focusing on the fundamentals, like staying diversified, and stick to your long-term strategy to ensure you’re on track for your goals.

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