{"id":269769,"date":"2026-06-17T17:19:11","date_gmt":"2026-06-17T17:19:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/269769\/"},"modified":"2026-06-17T17:19:11","modified_gmt":"2026-06-17T17:19:11","slug":"live-updates-trump-delays-jay-claytons-nomination-to-pressure-congress-on-voting-restrictions-bill-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/269769\/","title":{"rendered":"Live Updates: Trump Delays Jay Clayton’s Nomination to Pressure Congress on Voting Restrictions Bill"},"content":{"rendered":"

Kevin M. Warsh<\/a> is no stranger to delicate balancing acts, having helped formulate the Federal Reserve\u2019s response to the global financial crisis as a governor more than a decade ago. But the tightrope that he must now navigate as chairman of the central bank is particularly precarious.<\/p>\n

Mr. Warsh, just weeks into his tenure at the helm of the Fed, has inherited a multitude of economic challenges. A deal<\/a> has been struck to end the war with Iran, but the energy shock caused by months of tension has lifted inflation to the highest level in three years<\/a>. Officials at the central bank appear at odds over the need to more openly consider raising interest rates. And uncertainty over what message Mr. Warsh, who has called for regime change<\/a> at the Fed, will send at his first news conference on Wednesday has kept financial markets on edge.<\/p>\n

A decision by Mr. Warsh to downplay price pressures and talk up rate cuts would generate significant pushback from several of his new colleagues. It would also raise questions about his commitment to eventually returning inflation to the Fed\u2019s 2 percent target. Talking tough on inflation and keeping open the option of rate increases would help to burnish his credibility but risk angering President Trump, who has not wavered in his desire for lower interest rates.<\/p>\n

Mr. Warsh\u2019s pledge to recast how the Fed communicates adds yet another complication. He thinks policymakers should speak less frequently and resist providing signals about what the central bank might do next with rates. This so-called forward guidance boxes the Fed in, Mr. Warsh has argued, making it harder for central bankers to pivot if necessary.<\/p>\n

Mr. Warsh will do his best on Wednesday to avoid providing a steer in either direction \u2014 an approach that risks injecting an added dose of volatility into markets already bracing for a rate increase around year-end.<\/p>\n

\u201cJust given the novelty of the moment, because it\u2019s Warsh\u2019s first press conference, there\u2019s really a lot of scope for what you might call a \u2018market misinterpretation\u2019 of his message,\u201d said Kris Dawsey, head of economic research at the D.E. Shaw Group, a hedge fund. \u201cIt\u2019s going to take some time for the market to really get calibrated on his communications.\u201d<\/p>\n

Warsh\u2019s Debut<\/p>\n

The Fed on Wednesday is set to hold rates steady at a range of 3.5 percent to 3.75 percent for a fourth straight meeting.<\/p>\n

The policy statement that will accompany the rate decision is likely to scrap what officials have described as an \u201ceasing bias<\/a>,\u201d a stance that suggests a rate reduction is the most plausible next move. It generated significant opposition<\/a> at the last meeting in April.<\/p>\n

Mr. Warsh was sworn in as Fed chairman last month at the White House with President Trump, who has not wavered in his desire for lower interest rates.Credit…Haiyun Jiang\/The New York Times<\/p>\n

What will be hard to immediately discern is if the changes to the statement reflect growing support within the Fed to consider rate increases or if it is simply a byproduct of Mr. Warsh\u2019s longstanding objection to forward guidance.<\/p>\n

The statement on Wednesday will be accompanied by the \u201cdot plot,\u201d which aggregates what all 19 policymakers surmise will happen to rates over the coming years. The central bank also publishes what it expects to happen to inflation, unemployment and growth over that same time horizon.<\/p>\n

One of Mr. Warsh\u2019s first decisions as chairman revolves around whether he will provide his own projections. Opting out of the process would align with his past criticism of the dot plot and his vow to lead a \u201creform-oriented\u201d Fed. It would also help to shift the focus away from what Ellen Meade, who was a senior adviser to the Fed\u2019s board of governors until 2021 and is now a professor at Duke University, described as the \u201cridiculousness of microscoping the dots.\u201d<\/p>\n

But there could be drawbacks. \u201cTo not do so would look like a spiteful dissent against his own committee,\u201d said Michael Feroli, chief U.S. economist at J.P. Morgan.<\/p>\n

It is this group of policymakers that Mr. Warsh will need to persuade if he is to make progress on the changes he wants to enact, including shrinking<\/a> the Fed\u2019s $6.7 trillion portfolio of government bonds and mortgage-backed securities.<\/p>\n

Modifications to the cadence or the content of what the Fed publishes in terms of officials\u2019 forecasts do not require final approval by the committee, said Kurt Lewis, who served as a senior adviser to Jerome H. Powell<\/a> while he was Fed chair.<\/p>\n

But Mr. Lewis stressed that making these changes unilaterally would be a break with tradition. In the past, such alterations have occurred only after extensive deliberation until a consensus was reached, even if the support was not unanimous in the end. That was the case in 2012 when the Fed began publishing officials\u2019 rate projections.<\/p>\n

With or without Mr. Warsh\u2019s forecast on Wednesday, most officials are poised to scale back their expectations for rate cuts from estimates three months ago. As a result, the median estimate is expected to at a minimum show no cuts by year-end rather than the quarter-point reduction that was previously forecast. A number of officials are likely to pencil in a rate increase, reflecting what is expected to be a significant revision higher in the inflation forecast.<\/p>\n

High Bar for a Hike<\/p>\n

Still, the case for an immediate rate increase is not obvious.<\/p>\n

Prices for goods and services have risen sharply since the onset of the war with Iran. But the effect so far on \u201ccore\u201d inflation, which strips out volatile food and energy prices, has been more subdued, suggesting that the Middle East conflict has not yet caused significant spillover. In May, core inflation rose<\/a> just 0.2 percent, according to the latest Consumer Price Index report, or 2.9 percent from the same time last year.<\/p>\n

The announcement of a truce on Sunday, and the expected resumption of shipping activity through the crucial Strait of Hormuz, has had an immediate effect on energy markets. The price of Brent crude, the global benchmark for oil, fell to a roughly three-month low of $83 a barrel on Monday. Gasoline prices tend to trail fluctuations by a few days.<\/p>\n

An oil refinery in Carson, Calif. The energy shock caused by the war with Iran has lifted inflation to the highest level in three years.Credit…Justin Sullivan\/Getty Images<\/p>\n

The labor market, despite strengthening in recent months, is also not a source of inflation, said Richard Clarida, a former Fed vice chair who is now a global economic adviser at the investment giant PIMCO. Unemployment is stable, businesses are hiring at a faster pace and some workers are getting raises, although the bulk of those wage gains has been wiped out<\/a> by the recent bout of inflation. All of this has occurred as overall productivity has picked up, easing pressure on employers.<\/p>\n

\u201cI continue to think that the bar for a rate hike is high, but obviously not insurmountable,\u201d Mr. Clarida said.<\/p>\n

That would quickly change if there were signs that Americans were beginning to lose faith in the Fed\u2019s eventually returning inflation to 2 percent \u2014 a growing risk in light of recent shocks.<\/p>\n

Even before the war with Iran, progress toward that target had stalled<\/a>. Mr. Trump\u2019s tariffs had driven up prices, while costs for services like hospitality and transportation stayed unexpectedly high.<\/p>\n

Expenses related to the boom in artificial intelligence have soared as well, leading to \u201cinflation straight out of Econ 101 with demand exceeding supply,\u201d David Seif, an economist at Nomura, said. Mr. Warsh has argued<\/a> that the proliferation of A.I. will be \u201cstructurally disinflationary\u201d and in turn carve out space for the Fed to cut rates. But his new colleagues appear highly skeptical about that rationale against the current backdrop.<\/p>\n

A New Approach<\/p>\n

For Mr. Warsh, the Fed\u2019s focus should be trained on big, fundamental questions such as how A.I. might transform the economy, and filtering economic data through that kind of lens rather than getting bogged down in debates about what could happen to rates in the next six weeks.<\/p>\n

\u201cThere\u2019s a little bit of an imbalance of focusing so much on the bumps and wiggles from month to month that are very hard to predict and are pretty much noise filled,\u201d said Randall S. Kroszner, a University of Chicago economist who served as a governor at the central bank alongside Mr. Warsh.<\/p>\n

That emphasis, Mr. Warsh has argued, has contributed to a cacophony of opinions from Fed officials that often results in mixed signals and miscalibrated policy settings.<\/p>\n

But it is improbable that Mr. Warsh will be able to significantly curtail how much other policymakers are speaking, although he will have the latitude to shape the substance of what they are debating.<\/p>\n

Officials will also have even greater incentive to speak out if they do not feel that Mr. Warsh is representing the committee\u2019s view at the news conferences held after each of the eight policy meetings a year. At his confirmation hearing, Mr. Warsh noted that, legally, the central bank did not need to have as many meetings, but stopped short of endorsing any reduction.<\/p>\n

Mr. Lewis, Mr. Powell\u2019s former adviser, who is now the head of central bank policy at the investment bank Piper Sandler, warned that markets could seize up if Mr. Warsh wound back the Fed\u2019s communications too significantly and opted to skirt specifics at Wednesday\u2019s news conference.<\/p>\n

\u201cLess communication is not necessarily less information, but if it is legitimately meaningfully less information, you should expect there to be a higher uncertainty about how policy works and therefore greater volatility,\u201d Mr. Lewis said.<\/p>\n","protected":false},"excerpt":{"rendered":"Kevin M. Warsh is no stranger to delicate balancing acts, having helped formulate the Federal Reserve\u2019s response to…\n","protected":false},"author":2,"featured_media":269754,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[1452,9204,14670,9,24,63,134,136,135,1069,5251,1876],"class_list":["post-269769","post","type-post","status-publish","format-standard","has-post-thumbnail","category-staten-island","tag-donald-j","tag-immigration-and-emigration","tag-iran","tag-new-york","tag-new-york-city","tag-nyc","tag-staten-island","tag-staten-island-headlines","tag-staten-island-news","tag-trump","tag-united-states-defense-and-military-forces","tag-united-states-politics-and-government"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/269769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=269769"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/269769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/269754"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=269769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=269769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=269769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}