Warsh at the Fed just gained legal cover to raise rates despite Trump's pressure, as inflation tops 4 percent and markets brace for a hike. all right.
Federal Reserve policy under Chair Kevin Warsh got a jolt of clarity this week after the Supreme Court upheld the constitutional structure that shields Fed board members from being fired without cause. Investors are now pricing in a real chance Warsh could raise interest rates this year even as inflation runs hot, a scenario that would put him at odds with President Donald Trump.
The ruling, handed down Monday, protects the Fed's independence across both its monetary policy and bank regulatory functions, even as the same court declined to extend similar protections to other federal regulators. Scott Alvarez, who spent more than a decade as the Fed's general counsel, said the decision matters because it closes off a path presidents might otherwise use: firing a central banker under the guise of regulatory oversight rather than admitting the real motive is disagreement over rate policy.
