Here’s the twist nobody saw coming.
Kevin Warsh was confirmed as the new Chairman of the Federal Reserve on May 15th — widely expected to be the guy who finally brought interest rates down. Markets were anticipating it. Borrowers were hoping for it.
Now? There’s serious talk of rates holding steady — and growing whispers of a potential increase.
Here’s why that’s ironic: the economy is cooling. Companies are pulling back on hiring. Americans are spending more at the register and taking home less. Credit card delinquencies are at a decade high.
That should be the green light for cuts. So what’s the problem?
One word: inflation. It’s running at 3.8% — nearly double the Fed’s 2% target. Lower rates mean cheaper borrowing — which sounds great until it drives prices even higher. Cutting rates now would be like pouring fuel on a fire that hasn’t gone out yet. It would feel good short-term and hurt everyone later — especially for the people already stretching their budgets.
On June 16–17, the Federal Open Market Committee (FOMC) – the 12-person jury that sets U.S. interest rates – will deliver its next verdict. Until then, Warsh’s hands are largely tied, and so are the other 11 voices in that room.
We’ll be watching that one closely.
Plan well,
Barbara
May 31, 2026
P.S. I’ll be stepping away and soaking up a bit of sun for the next two weeks, so you’ll be hearing from my guest writer, Julie Derry. Julie is the founder of Aging123 in San Diego, a trusted resource helping families navigate senior placement and the complexities of aging. I think you’ll really enjoy her perspective. I’ll be back in your inbox on June 21st.
Sources:
- Chase — kevin-warsh-is-the-new-chair-of-the-federal-reserve — chase.com
- Scale.jobs — us-labor-market-cooling-five-year-low — scale.jobs
- Financial Content — the-great-pullback — financialcontent.com
- Equitable Growth — equitablegrowth.org
- Fortune — dominoes-are-steadily-falling — fortune.com
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