Warsh to Take Helm of Fed; Central Bank Points Out 2 Unusual Aspects, Focuses on Reform Direction
Kevin Warsh is set to succeed Jerome Powell as the new Chairman of the U.S. Federal Reserve. This appointment is marked by two rarities: a highly divided confirmation vote and Powell's decision to remain a governor after his chairmanship, an unprecedented move.
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- 📰 Published: May 14, 2026 at 17:18
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Central News Agency, Taipei, 14th — The new leadership of the U.S. Federal Reserve (Fed) has been finalized, confirming that Kevin Warsh will succeed Jerome Powell as the new Fed Chairman. Taiwan's Central Bank posted on its Facebook fan page today, pointing out '2 unusual aspects' of this appointment. First, Warsh's nomination passed with a rare, highly divided vote. Second, Powell will remain a governor after stepping down, a first for the Fed in nearly 80 years.
The Central Bank posted today on its 'Global Central Bank Watch' series on Facebook to explain the special features of the new U.S. Fed Chair appointment, and noted that with Warsh taking over as Fed Chair, the future direction of reforms is under scrutiny.
The Central Bank pointed out that Fed Chair Jerome Powell will step down on May 15, to be succeeded by Warsh. Warsh's appointment was confirmed by the U.S. Senate with a 54-to-45 vote, a rare instance of a highly divided vote in U.S. history. On the other hand, Powell announced at his final press conference as Chair that he would remain a Fed governor after his term ends.
The Central Bank stated that in 1948, then-Fed Chairman Marriner Eccles remained a governor after stepping down and confronted then-President Harry S. Truman on interest rate policy, establishing the Fed's independence. Powell remaining a governor after his chairmanship is a first for the Fed in nearly 80 years. At the June FOMC meeting this year, for the first time in a long while, a current and a former Fed Chair will participate in decision-making simultaneously.
According to Powell, his decision to stay on is to maintain monetary policy independence amidst rising political pressure and to wait for the investigation into the Fed headquarters renovation project to conclude. He emphasized that he will maintain a low profile and that 'there is only one Fed Chair,' with no intention of becoming a 'shadow chair.'
As for Warsh, he stated during his nomination hearing on April 21 that he may push for several reforms in the future, including improving the Fed's external communication methods, establishing new inflation assessment indicators, shrinking the Fed's balance sheet to rely more on interest rate tools, and advocating that the Fed should focus on its core monetary policy responsibilities.
Since 2012, the Fed has released a 'dot plot' every quarter, reflecting each FOMC member's outlook on the policy rate, which has become a market indicator for the future interest rate path. However, Warsh disagrees, advocating for the abolition of the dot plot and downplaying forward guidance, believing that excessive policy guidance limits policy flexibility and increases market noise. He also questioned the necessity of regular press conferences.
Furthermore, Warsh believes that the core PCE inflation indicator commonly used by the Fed (which only excludes food and energy prices) is too crude and easily affected by daily market price fluctuations. He calls for adopting 'trimmed mean inflation' or 'median inflation' to exclude extreme price volatility and more accurately observe broad price trends. (Editor: Chang Chun-mao) 1150514
The Central Bank posted today on its 'Global Central Bank Watch' series on Facebook to explain the special features of the new U.S. Fed Chair appointment, and noted that with Warsh taking over as Fed Chair, the future direction of reforms is under scrutiny.
The Central Bank pointed out that Fed Chair Jerome Powell will step down on May 15, to be succeeded by Warsh. Warsh's appointment was confirmed by the U.S. Senate with a 54-to-45 vote, a rare instance of a highly divided vote in U.S. history. On the other hand, Powell announced at his final press conference as Chair that he would remain a Fed governor after his term ends.
The Central Bank stated that in 1948, then-Fed Chairman Marriner Eccles remained a governor after stepping down and confronted then-President Harry S. Truman on interest rate policy, establishing the Fed's independence. Powell remaining a governor after his chairmanship is a first for the Fed in nearly 80 years. At the June FOMC meeting this year, for the first time in a long while, a current and a former Fed Chair will participate in decision-making simultaneously.
According to Powell, his decision to stay on is to maintain monetary policy independence amidst rising political pressure and to wait for the investigation into the Fed headquarters renovation project to conclude. He emphasized that he will maintain a low profile and that 'there is only one Fed Chair,' with no intention of becoming a 'shadow chair.'
As for Warsh, he stated during his nomination hearing on April 21 that he may push for several reforms in the future, including improving the Fed's external communication methods, establishing new inflation assessment indicators, shrinking the Fed's balance sheet to rely more on interest rate tools, and advocating that the Fed should focus on its core monetary policy responsibilities.
Since 2012, the Fed has released a 'dot plot' every quarter, reflecting each FOMC member's outlook on the policy rate, which has become a market indicator for the future interest rate path. However, Warsh disagrees, advocating for the abolition of the dot plot and downplaying forward guidance, believing that excessive policy guidance limits policy flexibility and increases market noise. He also questioned the necessity of regular press conferences.
Furthermore, Warsh believes that the core PCE inflation indicator commonly used by the Fed (which only excludes food and energy prices) is too crude and easily affected by daily market price fluctuations. He calls for adopting 'trimmed mean inflation' or 'median inflation' to exclude extreme price volatility and more accurately observe broad price trends. (Editor: Chang Chun-mao) 1150514