The U.S. May non-farm payrolls report is set for release tonight, marking the first such report since Warsh assumed his new role.
Having vowed to reform the Federal Reserve upon taking office, Warsh has begun arranging internal personnel, with his latest hiring of two conservative economic policy researchers sending signals to the market. Although these two researchers are currently engaged in specific projects on a temporary contract basis, they are the first core staff members hired by Warsh since he took office.
An economist from Bloomberg Economics, David Wilcox, stated that in selecting advisors to assist him through his early tenure, the new Federal Reserve Chair Warsh has sent a second signal indicating his intention to make a clean break from the leadership style and habits of his predecessor, Jerome Powell. The first signal was Warsh's choice to be sworn in at the White House. He noted that the second signal is more significant as it begins to reveal the substantive plans Warsh may have in mind.
Appointing Conservative Researchers
Warsh officially took over as Federal Reserve Chair on May 22, 2026. His stated positions include weakening forward guidance and potentially using balance sheet reduction in conjunction with future interest rate cuts, though his full policy leanings are not yet fully apparent.
Warsh was sworn in at the White House East Room on May 22. Wilcox pointed out that this makes Warsh the first Fed Chair to be sworn in at the White House since Alan Greenspan in 1987, though the sitting President at the time, Ronald Reagan, was far more restrained in his public stance towards the Fed during his term than former President Donald Trump has been.
"In contrast, Powell was sworn in at the Federal Reserve headquarters in 2018, with then-Vice Chair for Supervision Randal Quarles presiding over the ceremony," Wilcox said. "When reappointed in 2022, Powell was again sworn in at the Fed headquarters, with then-Vice Chair Lael Brainard presiding."
Currently, Warsh has hired two conservative economic policy researchers to join the Federal Reserve. These researchers are Paul Winfree and Daniel Heil. Winfree is the author of the Federal Reserve chapter in the Republican conservative policy blueprint "Project 2025," while Heil is a research fellow at the Hoover Institution at Stanford University, where Warsh himself was affiliated before joining the Fed.
According to reports, people familiar with the matter revealed that the two researchers are "assisting Warsh with policy analysis as temporary contract staff and participating in special project planning for areas they have long collaborated with Warsh on." The source also indicated that Warsh has not made any other formal hires yet.
Warsh's personnel decisions are being closely watched. He possesses a broad network of advisors, including many prominent figures such as former Secretary of State Condoleezza Rice, investor Stanley Druckenmiller, and Chevron CEO Mike Wirth, all of whom attended Warsh's swearing-in ceremony at the White House last month.
However, Warsh appears to have few close advisors with prior experience working at the Federal Reserve or other major central banks. Warsh served as a Fed Governor during the 2007-2008 financial crisis under then-Chair Ben Bernanke. Since then, he has transitioned and become a critic of the central bank.
Wilcox stated that some of the proposals Winfree made in the Fed chapter of "Project 2025" are representative among conservative economists, even as other economists strongly oppose them.
"For example, Winfree argues that Congress should give the Fed only one monetary policy mandate—price stability—not two," Wilcox explained. "Other suggestions in his writing are even more unconventional. For instance, when discussing the potential risks of leaving monetary policy in the hands of a traditionally structured central bank, he wrote: 'The only lasting solution is to take monetary policy out of the hands of the Fed and return it to the people.' His preferred approach, as he himself acknowledges, would 'effectively abolish' the Federal Reserve."
Wilcox analyzed, "The other advisor, Heil, has no apparent experience in monetary policy or financial regulation. He previously worked with Warsh at the Hoover Institution at Stanford University. His research focuses on the federal budget, tax policy, and federal anti-poverty programs."
"Warsh is taking office at a time when inflation is above the Fed's 2% target and is projected to remain above target through 2027. Confidence among households, business leaders, and investors about the inflation outlook could help bring inflation down. This makes Warsh's early choices, which might otherwise seem largely symbolic, particularly important," Wilcox added.
Implementing 'Structural Change' at the Fed
During his campaign for the Fed Chair position, Warsh promised "structural change" at the Federal Reserve. In a 2025 interview, he stated that achieving this would require "cleaning house among some of the senior ranks at the Fed."
Recently, however, Warsh's rhetoric towards Fed staff has softened. At his swearing-in ceremony, Warsh said his "goal now is to create an environment where the best talent can do their best work."
It is evident that with current high U.S. inflation, the latest Fed Beige Book for June shows inflationary pressures re-emerging. While the economy maintains modest growth, consumption shows a divergence between wealthier and poorer households, directly dampening market expectations for interest rate cuts.
Current market expectations indicate a probability of over 99% that the Federal Open Market Committee (FOMC) will hold rates steady in June. The U.S. May non-farm payrolls report is due tonight. If tonight's jobs data exceeds expectations, bets on a rate hike by year-end could strengthen; conversely, expectations for rate cuts could reignite.
Wilcox stated that, in summary, Warsh's series of choices so far provide an initial indication of the kind of Fed Chair he intends to be. "During his nomination campaign, he promised 'sweeping reforms' and 'structural change' for the Fed. His choice of swearing-in venue, and especially his choice of advisors, suggest he may be taking that campaign promise quite seriously," Wilcox said.
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