Warsh Raises Rates Despite Cooling Inflation, a Sharp Contrast to Powell's Pre-Election Cut

BlockBeats reported on Sept. 17, citing public market data, that the Federal Reserve's policy stance in the run-up to elections has shifted markedly across leadership. Two months before the 2024 presidential election, the Fed under Chair Jerome Powell delivered a 50-basis-point rate cut even as core CPI remained elevated at 3.3%. Two years later, with the 2026 midterm elections two months away, the Fed led by Kevin Warsh raised rates by 25 basis points, despite core CPI easing to 2.4%. The contrast has drawn attention because Donald Trump had repeatedly pushed for lower interest rates and chose Warsh to lead the central bank, a decision markets initially interpreted as paving the way for easier policy. Instead, Warsh's first rate decision in office was a hike. Warsh cited a stronger U.S. economy, inflation pressures that remain uncomfortably high, and shifting geopolitical conditions. The Fed's reassessment of the outlook has also been influenced by U.S. actions against Iran and the resulting energy-market and broader geopolitical risks.