Kevin Warsh is now leading the Fed. His main challenge is a doozy.

Kevin Warsh’s ascent to Fed chair places inflation data at the center of his early tenure, with April PCE inflation expected to rise 3.9% year-over-year, the strongest reading for the central bank’s preferred gauge since May 2023. The report comes as oil-driven gasoline costs add upward pressure, complicating the campaign to slow price gains. Warsh was sworn in last Friday and has signaled a reform-focused agenda, including changes to how the Fed communicates and uses projections. Investors and economists alike are weighing whether inflation will leave room for rate cuts or potentially trigger further tightening, particularly given the Fed’s 2% target and a labor market that remains resilient. Markets and policymakers alike are watching the June 17-18 FOMC meeting for possible guidance on the path ahead, with some analysts signaling a non-trivial chance of a hike if inflation persists above target, while others see a more prolonged holding pattern into 2026.