Kevin Warsh may be the adult in the room. But can he calm the US economy?

The Federal Reserve has delivered a rare unanimous vote to increase interest rates after months of uncertainty, marking the first hike in three years as officials signal a tougher stance on inflation that has persisted well above the central bank’s 2% target. The decision came despite persistent pressure from the White House, underscoring the Fed’s independence amid broader economic and political divisions. While the move represents a shift toward conventional monetary policy, critics argue it highlights deeper governance challenges in the current administration. The central bank’s chair emphasized the seriousness of the action, framing it as a necessary step to address prolonged inflationary pressures.

Fed chair presided over unanimous decision to raise interest rates despite intense campaign from White HouseIn the end, Kevin Warsh’s Federal Reserve acquitted itself well. For all the uncertainty he had sparked at the previous meeting of the Federal Open Market Committee, when he refused to provide any indication of what he was prepared to do to tame stubborn inflation, the chair on Wednesday presided over a unanimous decision to raise interest rates for the first time in three years.“Today’s action starts to show that we’re serious about this,” he said at the press conference after the meeting, with “this” meaning inflation in excess of the Fed’s 2% target for over five years. Welcome though it was, his embrace of economic orthodoxy nonetheless did little to dispel the Keystone Cops quality of governance in Donald Trump’s US. Continue reading...