Warsh Takes the Reins at the Fed: What's Next? -

There's a new boss over at the Federal Reserve.
Is he going to be any different than the old boss?
Midweek Memo host Mike Maharrey delves into that question this week. He notes that Warsh certainly sounds different. But he's stepping into the same situation that Jerome Powell left. Mike explains why that will likely limit Warsh's options, meaning the new boss may end up acting just like the old boss when all is said and done. 
Mike also highlights the ever-growing Debt Black hole by breaking down the May federal budget deficit numbers.
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Mike opens the show, noting that there is a new boss over at the Federal Reserve. 
<blockquote>
"There’s no doubt that Kevin Warsh is going to be a different kind of Fed chair. He already started putting his stamp on the central bank with his first FOMC meeting last week. But folks would do well to remember that the new boss is running the same organization and facing the same problems as the old boss. That’s going to limit what he can and can’t do, and that means things may not look much different.
"But they’re definitely going to sound different, and it’s important to cut through the noise if we’re going to get a clear understanding of what monetary policy is going to look like moving forward."
</blockquote>
After sharing some highlights from his recent trip to Mexico, Mike provides a quick overview of the gold and silver prices. 
So, this morning, gold is getting pounded once again, and it looks like we’re going to test the $4,000 level, and silver has dipped below $60. For the last several months, gold has been reacting negatively to any negative war news. Now, good war news doesn’t even soothe the precious metals markets. Everybody is convinced this is a higher for longer interest rate environment. Meanwhile, the dollar is strong as the war risk unwinds and economic data seems relatively positive."
Mike says the current scenario has turned him bearish on gold and silver in the near-term. However, he's still long-term bullish for three reasons. 
<blockquote>
"1. Inflation isn’t going away. It’s the plan. 2. We still have a debt black hole, and it’s getting bigger. Debt-riddled economies need easy money, and 3. The de-dollarization trend is still in place. The world doesn’t trust the U.S. or its currency."
</blockquote>
As far as the new Fed chairman goes, Mike notes that he sounds a lot different from Powell. 
<blockquote>
"But one would be wise to remember that Kevin Warsh is enforcing the same laws in the same town as Jerome Powell did. While it sounded a lot different, the first FOMC meeting of the Warsh era looked exactly like the previous meeting."
</blockquote>
The Fed held rates steady and hinted at tighter policy in the future. That wasn't much different from the previous meeting. However, the messaging sounded much different. Or perhaps it would be more accurate to say, the lack of messaging. The official FOMC statement was much shorter than those issued during the Powell era. And Warsh worked hard not to signal the next move. The new chairman made it clear he's no fan of "forward guidance." Mike notes that he didn't even submit a plot for the latest dot-plot projections, saying the plot was "not helpful in the conduct of policy."
But Mike notes that cleaning up messaging is one thing. Reining in inflation for real is something else altogether. 
<blockquote>
"It’s easy for Warsh to insist that the Fed will bring price inflation back down to the 2 percent target. It’s easy to say, 'We’ll hike rates!' Delivering on the promise won’t prove as easy. It’s important to remember that Warsh is operating in the same environment as Powell was. The <a href="https://www.moneymetals.com/news/2025/11/15/debt-black-hole-putting-increasing-stress-on-american-consumers-004483">Debt Black Hole</a> still looms large, making rate hikes a dangerous prospect. In fact, holding rates steady may be enough to pop the debt bubble."
</blockquote>
Mike points out that the Debt Black Hole keeps getting bigger. He breaks down the May Treasury statement to drive home that point. The May deficit was nearly $300 billion as tariff revenues are falling and spending keeps climbing higher.  
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He also covers the interest expense data, revealing just how much the combination of higher interest rates and ballooning debt is stressing government finances. 
Mike stresses that most mainstream analysts seem to be ignoring the debt problem as they spin a narrative about higher interest rates creating a bearish environment for gold and silver.
<blockquote>
"The ugly truth is that debt-riddled economies don’t function very well in higher-interest-rate environments. It won’t take much to pop the debt bubble, and the central bankers at the Fed and the markets speculating about their next move seem to be ignoring this vital piece of the puzzle."
</blockquote>
In other words, the Fed is still caught in <a href="https://www.moneymetals.com/news/2026/03/19/gold-the-federal-reserve-and-a-catch-22-004773">a Catch-22</a>, whether Powell or Warsh is at the helm. 
<blockquote>
"So, what Warsh says isn’t relevant. The central bankers are limited in what they can do by the massive Debt Black Hole dominating society. They can inject the rate hike medicine and hope it doesn’t interact with the Debt Black Hole and hope it doesn’t kill the economy, or they can feed the Debt Black Hole with lower rates (and more inflation).
"Speculation that the Fed will hike rates has put significant downward pressure on gold and silver prices over the last two months. Conventional wisdom holds that higher rates are bearish for precious metals. But there is no guarantee that they will really be able to cut — no matter what Warsh may want to do. And if they do, there is a high likelihood it will precipitate a recession and/or a financial crisis."
</blockquote>
Mike notes that the central bank still plans to continue modest quantitative easing, despite all the hawkish talk. This reveals the difficulty of the path ahead for the central bankers at the Fed.
So, what is a Fed member to do?
<blockquote>
"Talk about how policy is in the right place and crack the door open for a rate hike, apparently. But ultimately, they will have to choose. Will they give the rate-hike medicine and hope the interaction with the Debt Black Hole doesn't kill the economy? Or do they forgo the medicine and pray inflation doesn't kill it? There is no good choice here. But historically, when push comes to shove, the Fed picks inflation."
</blockquote>
Mike says this is why you need to save in real money — gold and silver. The relentless devaluation of the dollar will not abate. Mike says now is a great time to call 800-800-1865 and talk with a Money Metals precious metals specialist. 
<h2>Articles Mentioned in the Show</h2>
<a href="https://www.moneymetals.com/news/2026/06/09/new-fed-chair-wants-to-move-the-inflation-goal-posts-004979">New Fed Chair Wants to Move the Inflation Goal Posts</a>

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