Warsh heralds a new era: New Fed boss cuts the guff and proves he's no Trump lackey, says ALEX BRUMMER

The first interest rate-setting meeting for a new Federal Reserve chairman was always going to be an arresting event.

Ideally, if the White House had its way, the anointed choice, Kevin Warsh, would have announced a Trump-pleasing rate cut.

Instead, with employment strong and the inflation fallout from the Strait of Hormuz still being felt, the hold of the US federal funds rate at a range of 3.5 per cent to 3.75 per cent was well-telegraphed.

Warsh, a former governor of the Fed, is very different from his predecessor, Jay Powell. 

Despite being a Trump first-term choice, Powell found himself under siege from Trump and encountered raw abuse over his refusal to cut rates.

He bravely hung on to the very end even though Trump went as far as to turn the dogs of the US justice department on him, with allegations of corruption.

Swearing in: New Federal Reserve Chairman Kevin Warsh, pictured, was previously a governor at the central bank   

Powell has been a great fan of openness, seeking to give the market clear guidance on interest rates and economic trends. At the post-rate decision press conference, he never hesitated to answer questions.

Warsh – tall, dark and very rich – came to the job with a different agenda. He told a Wall Street audience last month that his mantra was to ‘stop talking so much’.

That became reality last night when he cut a great deal of guff from his statement to the markets. That’s not an approach which will sit well with his inquisitors from 24-hour financial news channel CNBC.

Stephen Miran, whose stint at the Fed ended last month, gave more than 30 TV interviews in eight months. Warsh, who leans towards the inscrutable approach of the Alan Greenspan era, is unlikely to want the same.

If Britain’s latest consumer prices figure is believed the much-forecast shock from Donald Trump’s on-off conflict with Iran has never really arrived.

Chancellor Rachel Reeves’ response to headline consumer price inflation holding at a 13-month low of 2.8 per cent in May ran to two-and-a-half pages.

It had the air of a valedictory, with its focus on steps she has taken, such as cheaper funfair rides in August, to ease the burden on working people.

In reality, many governments across the globe learned the lessons of the prices shock following Russia’s war on Ukraine.

Energy markets have proved better at absorbing impacts. The gloomiest forecasts from the IMF and Bank of England look to have been wide of the mark.

Oil prices jumped when the air wars began but since then trading has been in a relatively narrow band.

Western and Asian economies were better stocked with strategic reserves than in previous conflagrations.

Here in Britain, there was a demand response with people doing less driving and gravitating towards electric vehicles.

Despite attacks on refineries and energy facilities the world’s biggest producers, such as Saudi Arabia, increased export volumes via alternative routes.

China’s appetite for vast volumes of imported energy declined as it drew from its vast strategic reserve. 

Since February 2022 there has been a switch away from energy-intensive industries in the G7 nations. Renewables have played a bigger role, and more consumers now have energy-saving white goods.

The AI boom in the US, symbolised by the ballooning value of SpaceX encouraged stepped-up investment in semi-conductors, offsetting the impact on output of higher energy costs.

It is terrific that Reeves postponed the fuel duty hike until the end of 2026. Motorists deserve nothing less. She has avoided panic measures she couldn’t afford because of Labour’s spending splurge.

The discovery by the Financial Conduct Authority of abuse in high-net-worth client checks at financial advisers and asset manager Rathbones is disturbing.

Clients, including readers and friends who put faith in Rathbones’ good sense and conservatism, are rightly feeling confused and let down.

Understanding what has gone wrong is not helped by Rathbones using technical phrases such as ‘client overboarding’ to explain difficulties – a term meaningless to a retail investor in the Pig & Whistle.

When will they learn?

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