Warsh sworn in as Fed chair, vows to fight inflation, backs crypto

Kevin Warsh was sworn in on May 22 as the 17th chair of the Federal Reserve after a narrow Senate confirmation vote. He succeeds Jerome Powell and said he will prioritize lowering inflation, reduce the central bank’s $6.7 trillion asset portfolio and take a more favorable view of cryptocurrencies.

Warsh served as a Fed governor, was a policy adviser during the George W. Bush administration and worked in finance. He resigned from the Fed’s Board of Governors in 2011 over additional rounds of quantitative easing and has since advocated for scarcer reserves, a leaner balance sheet and stricter inflation discipline.

The economy Warsh inherits features a federal funds target range of 3.50% to 3.75% and headline inflation of 3.3% in March after an oil-price shock tied to events in the Middle East. The March Federal Open Market Committee dot plot showed most officials expecting only one rate cut in 2026.

At his confirmation hearing he framed the Fed’s delayed response to the inflation surge as structural rather than a temporary error, and told senators, “Once you let inflation take hold in the economy, it is more expensive and harder to bring it down,” adding that “we need a regime change in the conduct of policy.” Market pricing moved toward faster quantitative tightening and fewer near-term rate cuts after those remarks.

Warsh has long criticized the post-2008 expansion of the Fed’s balance sheet. Unwinding the roughly $6.7 trillion portfolio will require selling or letting mature a mix of Treasury and mortgage-backed securities while monitoring market liquidity and borrowing costs.

On digital assets, Warsh has said Bitcoin is a “sustainable store of value,” rejected a retail central bank digital currency and described cryptocurrencies as part of the U.S. financial system. His public financial disclosure lists more than $100 million in exposure to digital assets across Layer 1 networks, decentralized finance protocols and Bitcoin payment infrastructure.

Warsh has proposed changes to how the Fed communicates. He has suggested ending regular post-meeting press conferences, retiring forward guidance as a tool and adopting what he called a “different, new inflation framework.” At the Powell-to-Warsh handoff he told staff he will not be anyone’s “sock puppet.”

The next FOMC meeting will be Warsh’s first opportunity to set policy as chair. Officials will decide how quickly to reduce the balance sheet, where to steer interest rates and how much information the Fed will provide to markets. Traders and investors are watching for actions that could affect the dollar, borrowing costs and risk assets, including cryptocurrencies.