With political drama dominating headlines in the UK, it is easy to pay less attention to more consequential events abroad. On 13 May, the US Senate confirmed the appointment of Kevin Warsh as chair of the Federal Reserve, positioning him with supreme influence over the US economy and, by extension, the global financial system.
The Fed chair is charged with maintaining maximum employment within the US economy, while keeping a lid on prices. As the leading light in the Federal Open Market Committee (FOMC), the chair acts as the most influential voice in determining the target interest (federal funds) rate, which directly impacts borrowing costs for US households and businesses.
Warsh, a former investment banker with Morgan Stanley, previously served as a governor on the Fed board under Ben Bernanke. During his previous tenure across both the George W Bush and Barack Obama administrations, he was viewed as being somewhat hawkish on interest rates.
