Exclusive: Warsh pledges to follow best of Fed's traditions, while also looking for change

• Warsh named Daniel Heil (Hoover Institution) and Paul Winfree (former Heritage Foundation, Project 2025 contributor) as temporary transition advisers to help plan reform initiatives
• His reform agenda includes reducing the Fed's $6.7 trillion balance sheet, providing less specific forward guidance on interest rates, and exploring alternative inflation measures
• The Fed's first meeting under Warsh on June 16-17 is expected to hold rates steady but will reveal new economic projections and signal policy direction as inflation remains above target

Summary: New Fed Chair Warsh Signals Policy Review and Reform Agenda

Key Developments:

Federal Reserve Chairman Kevin Warsh began his four-year term on June 2, 2026, pledging to uphold Fed traditions while pursuing significant reforms. In a memo to over 20,000 Fed employees, Warsh promised "open, clear-eyed discussions of Fed strategies, policies, and operations" in coming quarters.

Personnel and Advisers:

Warsh appointed two conservative analysts as temporary transition advisers: Daniel Heil (Stanford's Hoover Institution) and Paul Winfree (formerly Heritage Foundation, contributor to Project 2025's Fed reform chapter). Both have previously collaborated with Warsh on research projects.

Policy Priorities:

• Reducing the Fed's $6.7 trillion balance sheet
• Providing less specific forward guidance on interest rate decisions
• Exploring alternative inflation measures
• Reviewing operational strategies beyond past practices

Market Implications:

Warsh's first policy meeting is scheduled for June 16-17, where the Fed is expected to hold rates steady. New economic projections will signal policy direction under his leadership, particularly regarding inflation, which remains above the Fed's target.

Notable Context:

Warsh previously criticized predecessor Jerome Powell's policies and accused the Fed of straying beyond its monetary policy mandate. Powell now remains on the Board of Governors after stepping down as chair. The Fed also awaits a Supreme Court ruling on President Trump's attempt to fire Governor Lisa Cook, raising concerns about central bank independence.

The leadership transition occurs amid technological disruption and heightened scrutiny of Fed independence—what Warsh described as "a time of great consequence for our nation."