A market analyst predicts that the new Federal Reserve Chairman Kevin Warsh will slash interest rates.
The forecast comes despite most traders expecting a rate hike instead. The analyst's view focuses on the likely direction of policy under the new chairman.
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The Federal Reserve left its benchmark interest rate unchanged at 3.50%-3.75% on Wednesday in the first policy decision under new Chair Kevin Warsh. Policymakers signaled a more hawkish stance by raising projections for rates and inflation through 2028. Bitcoin and major stock indexes slipped after the announcement.
New Federal Reserve Chair Kevin Warsh has significantly cut back the central bank's communications, especially forward guidance on interest rates. The change aims to reduce market dependence on Fed signals but has already triggered volatility. Analysts say it may push borrowing costs higher for consumers and businesses.
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Kevin Warsh was sworn in as chairman of the United States Federal Reserve on Friday morning in a White House ceremony. President Trump administered the oath, replacing Jerome Powell who continues as a governor. Warsh pledged reforms at the central bank amid shifting rate expectations.
In its May 1, 2026 board meeting, Banco de la República unanimously kept the benchmark interest rate at 11.25%, surprising analysts expecting a hike to combat accelerating inflation. Finance Minister Germán Ávila participated fully, citing constructive dialogue, while board members justified the decision to maintain stability amid political pressures.
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Banco de la República general manager Leonardo Villar said monetary policy will keep rates high until inflation returns to the 2%-4% target range. The move followed the board's latest meeting.