Kevin Warsh became the 17th Federal Reserve Chair on May 15, replacing Jerome Powell. Trump had been demanding rate cuts for months and made no secret of his frustration with Powell. What was interesting during Warsh's confirmation was that he said he wouldn't commit to any rate cuts — and Trump appeared to be okay with that. Honestly, that's the right call. The market should guide the adjustments, not politics, especially now.
Inflation had been at or below 3% since June 2024, and was actually trending in the right direction, hitting a near low of 2.4% in January and February 2026. That had many expecting rate cuts were right around the corner. Then everything changed. Inflation jumped to 3.3% in March, 3.8% in April, and 4.2% in May. Some economists point to rising energy costs tied to the Iran conflict as adding fuel to the fire. That kind of move in three months is hard to ignore, and it changes the entire conversation around rates.
The Fed's rate currently sits at 3.50%–3.75%, unchanged across three consecutive meetings in January, March, and April 2026. According to the FedWatch tool, there's a 99.3% chance the Fed does nothing at their June 17 meeting. But here's where it gets interesting — it's no longer rate cuts that are off the table. Rate hikes are now being discussed. Some Fed officials have already raised the possibility of hikes if inflation continues to climb. That's a significant shift in tone from just a few months ago.
Warsh's focus remains on the money printing. He's been clear: "Run the printing press a little bit less. Let the balance sheet come down." In his view, the Fed's $7 trillion balance sheet is the root cause of today's inflation, and it needs to shrink before any rate relief is possible.
For buyers and sellers, elevated mortgage rates remain the reality heading into the second half of 2026 — and the June 17 announcement could push that conversation in an unexpected direction. If you'd like a current real estate review of your home, or just want to know what the market is doing in your neighborhood, feel free to reach out to me directly.
