Federal Reserve Chairman Jerome Powell speaks during a press conference after a meeting of the Federal Open Market Committee at the Federal Reserve Board Building in Washington on March 18, 2026.
Brandon Smialowski | AFP | getty images
Federal Reserve Chairman Kevin Wersh wants to lower interest rates. Fed officials signaled on Wednesday that if he is appointed to that job any time soon, it may be more difficult for him to do so than expected.
Fed officials raised their forecasts about the path of inflation and interest rates in data released by the central bank on Wednesday. This was largely expected given the rise in oil prices due to the Iran war. But Chairman Jerome Powell said oil was not the only factor his aides were considering.
“The higher forecast for inflation is also a reflection of the slow progress we have seen on tariffs,” Powell said.
The Fed publishes a survey of its top officials’ expectations for interest rates and the economy in a document known as Summary of Economic Projections. The SEP released on Wednesday showed the average official expectation for a closely watched measure of inflation, known as core personal consumption expenditure inflation, rose from 2.5% for 2026 in December to 2.7% for the year to March.
Meanwhile, the SEP showed several Fed officials raising their expectations for interest rates in so-called dot plots. It shows where Fed members believe interest rates will go. The March dot plot showed several Fed officials ruling out the possibility of multiple cuts this year.
Those estimates are anonymous, but a Fed official who previously voted publicly for a rate cut changed his position in March. Fed Governor Christopher Waller dissented in favor of lower interest rates in January, when the Fed also opted not to change interest rates. In the most recent meeting, Waller agreed with Powell to keep rates unchanged.
President Donald Trump, who has not been shy about wanting low interest rates, appointed Waller to his job and considered Warsh for the chair before choosing him.
This means Warsh may face a tough race if he gets confirmed early. Wersh wants to cut interest rates, as Trump has demanded of his nominee. But the chairman has only one vote out of 12 on the Fed’s rate-setting committee. He will need to bring the rest of the Fed with him, and it appears that many Fed members are positioning themselves to make the cuts tougher ahead of Warsh’s potential confirmation.
According to Powell, those officials are concerned not only about what impact a continued rise in oil prices could have on the economy, but also about what impact Trump’s tariffs are having. This situation continues even after the Supreme Court recently declared a large portion of Trump’s tariffs illegal. The Administration has moved to reimpose the tariffs under alternative authorizations.
When Varsh can be confirmed is an open question. Senator Thom Tillis, R-N.C. Has said he will not vote to confirm Warsh until the criminal investigation of Powell related to increased office renovation costs is resolved.
Powell has denied the allegations. A federal judge last week filed a motion to quash the subpoena against the feds. The Justice Department said it would appeal. While this process continues, Powell will remain in his job. And Warsh’s confirmation is still on hold, potentially delaying the moment when he would have to grapple with inflationary pressures that could get in the way of lower interest rates.