--- title: Kevin Warsh Is the New Head of the Fed. Here's Why This Matters for Your Money description: 'Kevin Warsh is replacing Jerome Powell at an interesting time in Fed history: Inflation is up, and its independence is under fire.' authors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum editors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. education: University of Florida at_money_since: 2015 articles: 217 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Retirement - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ published: '2026-05-22T12:10:32.000Z' section: Economy and Politics tags: - dollar scholar - News word_count: 585 canonical: https://money.com/new-fed-chair-kevin-warsh/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Kevin Warsh](https://img.money.com/2026/05/News-Kevin-Warsh-Fed-Chair.jpg) The Federal Reserve is about to welcome a new chair for the first time in eight years as Kevin Warsh takes the reins from [Jerome Powell](https://money.com/dollar-scholar-federal-reserve-jerome-powell/). And while what's happening in Washington may feel far away from your everyday financial life, it's a change worth paying attention to. "Does the average investor \[or\] consumer need to care about what's happening at the Fed?" says David Busch, chief investment officer at [Trajan Wealth](https://trajanwealth.com/). "Absolutely." That's because Warsh is taking the helm of the central bank at a particularly interesting time in Fed history. The bank is charged with a dual mandate — to keep unemployment low and prices stable — and because of the Iran war and the White House's [tariff policies](https://money.com/tariffs-inflation-impact), inflation is running hotter than the Fed likes. As of March, the [inflation measure](https://www.marketplace.org/story/2026/02/18/why-does-the-fed-prefer-pce-as-a-measure-of-inflation) the Fed tracks was up 3.2% year-over-year. The Fed's long-run target is 2%, which makes it all but certain that Warsh's first moves as chair will be focused on slowing price increases. The primary tool the Fed has to achieve its goals is the federal funds rate, or the interest rate banks pay when they lend each other money overnight. The 12-person Federal Open Market Committee votes throughout the year whether to increase or decrease the rate's target range. Although Warsh will lead that committee, his vote will count the same as the other members'. "Warsh can't come in and unilaterally, on his own, make rate decisions," Busch adds. Loretta Mester, an adjunct professor of finance at the Wharton School of the University of Pennsylvania, points out that just the chair is changing — not the makeup of the whole group. In fact, Powell himself has vowed to serve out the rest of his term (which doesn't end until 2028) as a member of the committee. This helps with continuity. Even if Warsh changes up some of the Fed's processes, like how often it gives press conferences and which inflation metric it prefers, its core responsibilities will remain the same. What's notable, however, is that the U.S. is in the middle of a massive debate over how politically independent the central bank should be. Since taking office for his second term, President Donald Trump has applied [increasing pressure](https://money.com/can-trump-demand-lower-interest-rates) on Powell to bring down interest rates, a campaign that has involved his administration investigating Powell, publicly calling him a "numbskull" and admitting to wanting to "fire his ass." When the federal funds rate is high, borrowing is expensive: Credit card APRs rise, new auto and personal loans cost more, and people tend to spend less. When it's low, debt becomes cheaper to carry, so people are encouraged to spend. Lawmakers often push for [low interest rates](https://money.com/how-to-prepare-for-fed-rate-cuts) because of their ripple effect throughout the economy. In that way, Trump's timing makes sense: He likely wants the Fed to slash rates so voters feel good financially going into the midterm elections. However, Mester, who was president of the Federal Reserve Bank of Cleveland from 2014 to 2024, says this could lead to higher inflation later on. Research has shown, too, that mixing monetary policy and politics ultimately results in worse outcomes for the public. So keeping an eye on Warsh — particularly, what agenda he sets for the Federal Open Market Committee and how he interacts with the president — is a smart idea. "Everyone should be wanting the Fed to be able to make its policy decisions independent of political influence," Mester says. 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