Fed Chair Warsh Debuts with PCE at 90th Percentile, Rate Cuts Unlikely

Kevin Warsh assumed the role of Fed Chair amid a sticky core PCE at the 90th percentile of its past-year range, limiting prospects for upcoming rate cuts. The current upper bound of the fed funds target stands at 3.75%, unchanged since December 10, 2025, after three cuts within six weeks last fall. Market observers, including Jim Cramer, anticipate a cautious approach from Warsh during his appearance in Sintra, Portugal, indicating continuity rather than drastic policy changes. As the VIX remains at 16, Warsh's performance could influence rate-cut discussions at the next FOMC meeting.