Kevin Warsh becomes Federal Reserve chair

Kevin Warsh had not yet taken over as chair of the Federal Reserve as of May 15, despite social-media posts saying he had already replaced Jerome Powell. The Federal Reserve said on May 15 that Powell’s four-year term as chair had ended and that the Board had named him chair pro tempore until Warsh is sworn in as the new chair. The U.S. Senate confirmed Warsh on May 13 to serve a four-year term as chair and, a day earlier, to a 14-year term as a member of the Board of Governors. The Fed’s latest weekly balance-sheet release, dated May 7, showed the central bank held $1.981 trillion in mortgage-backed securities. ### Did Kevin Warsh actually become Fed chair on May 15? The Federal Reserve said on May 15 that Powell would serve as chair pro tempore until Warsh is sworn in as the new chair. The Board said the temporary step was “consistent with past practice during similar transitions between chairs.” The U.S. Senate’s nominations record shows Warsh was confirmed on May 13 to be chairman of the Board of Governors for a four-year term, after being confirmed on May 12 to a 14-year term as a governor. Reuters reported on May 13 that Warsh’s swearing-in to both positions awaited final White House paperwork sent by the Senate. ### What changed for Jerome Powell? (federalreserve.gov) Jerome Powell’s chair term ended on May 15, but his Board term is separate and runs through January 31, 2028, according to the Federal Reserve’s biography page. That means he can remain a governor even after his chair term expires. The Fed’s May 15 statement did not say Powell had left the Board. It said only that he would temporarily remain at the head of the Board until Warsh is sworn in. (senate.gov) ### Where did the $1.98 trillion mortgage-bond number come from? The Federal Reserve’s H.4.1 balance-sheet release for the week ended May 6 listed “Mortgage-backed securities” at $1,981,060 million. (federalreserve.gov) That is about $1.98 trillion, the figure cited in posts circulating on May 15. The same release showed Treasury securities at $4.427 trillion and total securities held outright at $6.411 trillion. (federalreserve.gov) The Fed updates that H.4.1 release weekly, typically on Thursdays, according to its balance-sheet information page. ### Are there official signs the Fed is preparing new MBS purchases? No Federal Reserve statement reviewed for May 15 announced a restart of mortgage-backed securities purchases. (federalreserve.gov) The Fed’s public materials available through May 15 showed the existing stock of MBS on its balance sheet, but not a new purchase program. Reuters reported on May 13 that Warsh had argued for a smaller Fed balance sheet and had said that should permit a lower policy rate. (federalreserve.gov) That is different from an official announcement that the central bank will buy more mortgage bonds. ### Why did the social posts tie Fed leadership to mortgage rates? (federalreserve.gov) Mortgage-backed securities are one of the Fed’s balance-sheet tools, and the central bank’s holdings are published in its weekly data releases. Posts on X referenced that public data and speculated that renewed purchases could reduce mortgage rates, but the posts themselves were not official policy statements. (money.usnews.com) Kevin Warsh’s own confirmation process focused on leadership of the central bank and broader policy direction. The official records reviewed here do not show a May 15 decision by Warsh or the Board to begin buying additional MBS. ### What is the next thing to watch? The next immediate milestone is Kevin Warsh’s swearing-in as both a governor and chair of the Federal Reserve. (federalreserve.gov) The Fed said on May 15 that Powell would remain chair pro tempore until that happens, and the next scheduled public balance-sheet update is the weekly H.4.1 release, which the Fed says is typically published on Thursdays. (federalreserve.gov) (senate.gov)