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Exclusive-Warsh pledges to follow best of Fed's traditions, while also looking for change
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Exclusive-Warsh pledges to follow best of Fed's traditions, while also looking for change
Jun 2, 2026 3:38 PM

WASHINGTON, June 2 (Reuters) - Federal Reserve Chairman Kevin Warsh pledged to follow "the best of the Fed's traditions" in an opening note to the central bank's more than 20,000 employees as he starts his four-year term, while also promising a broad look at what might be done differently.

The memo is an early window on Warsh's efforts to pursue what he has described as an extensive reform agenda for a central bank he regards as having strayed from its mission, while also mending fences with colleagues and staff whose work he has criticized.

"Our highest priority will be to get policy right in service to our remit and the national interest. We will ensure an environment that supports our people in doing their life's best work," Warsh said in the memo, sent on Tuesday and reviewed by Reuters.

"We won't rely on past practices when we find better alternatives," Warsh said. "In the coming quarters, I expect that together we will have open, clear-eyed discussions of Fed strategies, policies, and operations."

Separately, the Wall Street Journal reported that Warsh has named two conservative analysts to advise him during a transition period as he takes over from former Fed Chair and now Governor Jerome Powell.

Daniel Heil is a policy fellow at Stanford University's Hoover Institution, where Warsh also worked prior to becoming Fed chair. Paul Winfree was formerly with the Heritage Foundation and assembled the chapter on Federal Reserve reform included in the think tank's controversial Project 2025 blueprint for conservative reform.

Warsh has laid out his own ideas for change at the Fed, including a desire to pare the Fed's $6.7 trillion balance sheet, to talk less specifically about coming interest rate decisions, and to discuss if there are alternate measures of inflation that better capture price pressures in the economy.

In the months he was under consideration as chair, Warsh was often deeply critical of the Powell Fed's approach to policy, and of a Fed system, including the 12 regional reserve banks, he felt had strayed into issues beyond monetary policy.

Now leading the organization he criticized, Warsh struck a more boosterish tone in the memo.

"This new chapter at the Fed finds us in a time of great consequence for our nation. New technologies and new ways of doing business are arriving with unmatched speed," Warsh wrote. "I could not be more optimistic about all that we can achieve together."  

The first meeting with Warsh as chair - and likely his first substantive comments about the economy and monetary policy - will be on June 16-17. The Fed is expected to hold interest rates steady, but new economic projections will set expectations about where policy is heading under Warsh and whether his colleagues are concerned that inflation, which remains above the Fed's target, may get worse.

His tenure starts on an unusual footing.

The Fed is awaiting a Supreme Court ruling on President Donald Trump's attempt to fire Governor Lisa Cook, seen as a direct threat to the Fed's independence in setting monetary policy, perhaps its most central tradition.

In addition, Warsh will preside over a body that includes its former leader, Powell, who because of the administration's efforts to influence the Fed decided to remain in his seat on the Fed's Board of Governors. 

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